Oracle – VAT applicability between a parent company and a permanent establishment in Italy

Really this can apply to any EU country and comes under the tax engine rules for Same VAT Group and can apply to any VAT or GST based tax regime.

In reference to the original article by the TMF group on VAT in Italy between a parent company and its child, I thought that i would try and explain this in terms of setting up the tax in Oracle R12 eBTax or Oracle Cloud Tax.

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Italy reduces Blacklist countries

Any Italian VAT registered business, resident and non-resident, must produce a regular report on transactions undertaken with a business resident in a Blacklist country, with increased restrictions on the deductibility of costs incurred from the countries. Italy have now removed several countries from its ‘Black list’ of countries that require this additional reporting.

Malaysia, Singapore and the Philippines have now been removed from this ‘Black list’ or ‘Modello Polivalente’, still leaving over 40 countries on it.

For a full list of countries see the earlier eBiz Answers post: Italian Tax Black List

Italy VAT rise looking unlikely

Italy VAT rise looking unlikely

Having already increased the VAT rate to 22% in 2013 Italy was facing another VAT increase to 24% in 2016, with an even further potential increase to 26.5% in 2018. This increase was proposed as the Italian total debt has continued to rise in recent years, and was looking to rise to 130% of GDP in 2015. Italy failed to reduce spending enough so as to reduce its deficit as a percentage of GDP to below 3%, which is a basic requirement for membership of the Euro currency. Continue Reading

Italian Vat Rumours and Russian Sales Tax

Italy considers 2015 VAT increase as finances worsen

The latest Italian budget revealed that the government is considering a new VAT rise. Italy raised its VAT rate to 22% in October 2013. Italy had already raised it 1% in 2011 from 20% at the height of the Euro currency crisis.

Italy’s public debt is the second highest in the euro zone as a percentage of GDP, and it has risen steadily to record highs above 130 percent of national output. The government deficit is continuing to drift away from the 3% of GDP target – a key rule for continuing membership of the Euro currency. Continue Reading

Oracle R12 eBTax Italy rate rise to 22%

Italy VAT rise to 22% on 1 Oct 2013

The planned rate rise that had been put off has now gone ahead and is in effect as of today, 1st October 2013. So please ensure you have updated your tax rates in Oracle R12 and Fusion tax, dont forget to also change your offse tax amounts!


The reduced VAT rates of 10% and 4% will not change.

Contact us if you need help changing your tax rate in Oracle