Indirect taxes are taxes that are not directly linked to a person’s income or assets, but to individual economic transactions related to the circulation of goods and services as well as to certain legal acts and transfers of assets. Taxation does not concern income, but its use.
Indirect taxes are of central importance in day-to-day business operations, in particular in invoicing, contract drafting, as well as in real estate and cross-border transactions. They affect both pricing and the tax structuring of business transactions.
They therefore form an essential part of the Italian tax system. They cover a wide range of economic transactions and are relevant both for companies and for private individuals in numerous everyday situations.
Distinction from direct taxes
In contrast to direct taxes (imposte dirette) such as IRPEF or IRES, which are directly linked to income or assets, indirect taxes refer to individual transactions.
Typical characteristics are:
- Link to specific economic transactions
- Taxation of consumption and exchange
- Possibility of economic passing-on to the final consumer
Structure of indirect taxes in Italy
Indirect taxes cover in particular:
- Supplies of goods and services
- Legal acts and documents
- Transfers of assets
- Certain consumption-related transactions
Main indirect taxes
- Value Added Tax (IVA – Imposta sul valore aggiunto): general consumption tax on supplies of goods and services
- Registration tax (imposta di registro): tax on the registration of certain contracts and legal acts
- Stamp duty (imposta di bollo): tax on certain documents and official papers
- Stamp Duty Land Tax (Imposte ipotecarie e catastali): taxes related to real estate transfers and registrations
- Inheritance and estate tax (imposta sulle successioni e donazioni): tax on gratuitous transfers of assets
- Excise duties (accise): taxes on certain goods such as energy products, alcohol, or tobacco