In 2025, Italy is taking a more aggressive stance on VAT enforcement and tax compliance, targeting both domestic and cross-border e-commerce operators. With tax revenue losses mounting and pressure from EU digital market reforms, Italian authorities are increasing scrutiny, imposing new guarantees, and pursuing high-profile investigations—most notably against Amazon.

For online sellers and marketplaces, the message is clear: non-compliance with Italian tax law now carries operational and financial risk. Adapting to the country’s evolving VAT framework is essential for maintaining business continuity and market access.

Key Developments in Italy’s VAT Crackdown

€1.2 Billion VAT Investigation Into Amazon

In early 2025, Italy launched an investigation into Amazon for alleged €1.2 billion in unpaid VAT over multiple years. The total exposure—including penalties and interest—could exceed €3 billion. Authorities allege that the platform facilitated transactions without proper VAT collection or reporting mechanisms for thousands of third-party sellers, many of them foreign.

New Guarantee Rules for Non-EU Sellers

Italy now requires non-EU sellers to appoint a fiscal representative and provide a financial guarantee of €50,000 per registration to maintain inclusion in the VAT Information Exchange System (VIES). This new requirement applies to both B2C and B2B sellers operating through Italian or EU marketplaces.

VIES Deregistration for Non-Compliance

Suppose non-EU sellers fail to submit the required guarantee or designate a qualified fiscal agent. In that case, they face automatic deregistration from VIES—cutting them off from intra-EU tax documentation and compliance networks. This severely impacts fulfillment, customs clearance, and order processing within Italy and the broader EU.

Marketplace Responsibility for VAT Collection

Under Italy’s updated e-commerce tax model, marketplaces may be held liable for VAT collection on behalf of third-party sellers. Platforms must ensure proper invoicing, VAT registration checks, and periodic reporting to avoid secondary liability.

Impact on E-Commerce Operators

For Non-EU Sellers

• Operational Costs Rise: The €50,000 VAT guarantee adds a significant cost barrier, particularly for small and mid-sized exporters.
  
• Compliance Burden Increases: Sellers must work with certified fiscal representatives and meet strict documentation requirements.
  
• Risk of Market Exclusion: Non-compliance may result in blocked sales, customs holds, or deactivation on major platforms.
  

For Marketplaces

• Stronger Auditing Obligations: Platforms must validate seller credentials and ensure automated VAT collection tools are functioning across all seller accounts.
  
• Joint Liability Risks: Failure to enforce tax obligations may result in substantial fines or reputational damage.
  
• Need for Local Tax Expertise: Growing regulatory complexity requires investments in local legal, tax, and compliance teams.
  

Strategic Recommendations for Sellers and Platforms

• Appoint a Qualified Fiscal Representative: Ensure that your representative is recognized by Italian tax authorities and capable of managing ongoing obligations.
  
• Submit the VAT Guarantee Before Deadlines: Italian authorities are enforcing strict timelines in mid-2025. Missing them may jeopardize your entire EU operation.
  
• Implement Real-Time VAT Validation: Platforms should adopt automated systems to cross-check seller VAT numbers and verify invoice status in real-time.
  
• Stay Updated on EU-Wide VAT Trends: Italy's enforcement may preview broader action across other EU states. Align your compliance roadmap with long-term regional changes.
  

Italy’s intensified approach to VAT and tax compliance is redefining the rules for e-commerce across Europe’s third-largest market. From high-profile audits to stringent guarantee rules for non-EU sellers, the regulatory environment is shifting fast. For platforms and cross-border merchants alike, success now depends on proactive compliance, local representation, and deep awareness of fiscal obligations. Those who adapt early will retain access to a high-value, digitally engaged consumer base—those who don’t may find themselves locked out.

The post Intensifying VAT and Tax Compliance Reshapes E-Commerce in Italy appeared first on Cross-Border Magazine.

The European Union's finance ministers have approved a legislative package to modify VAT rules for digital commerce throughout the region.

From 2030, new regulations will come into force to ease the tax burden on small businesses and combat VAT fraud, a persistent problem in cross-border trade. The reform establishes that all companies that sell goods and services subject to VAT in other EU countries must report each transaction in real time through a digital system.

Although this measure might seem like an increase in bureaucracy at first glance, the process will be simplified thanks to a one-stop shop system for VAT, allowing companies to register only once and manage all their international transactions through a digital platform. 

This will significantly reduce the administrative burden compared to the current system, in which companies must report their transnational sales quarterly.

Anti-fraud policies? 

One of the main reasons behind this change is the attempt to curb tax fraud. The current system allows some fraudsters to evade VAT by taking advantage of loopholes in the legislation.

The EU hopes to close these loopholes by implementing real-time reporting. In addition, the reform will affect home rental platforms such as Airbnb and Booking.com, which will also require collecting VAT from users and transferring it to the relevant tax authorities. This measure is intended to strengthen the fight against tax evasion in emerging digital commerce sectors.

The European Parliament has already approved these measures, which must now be published in the Official Journal of the EU and adapted to the national laws of each Member State. The technical infrastructure necessary for implementing this digital VAT declaration system is under development and is expected to be ready for use in 2030.

The post The EU approves new VAT rules for e-commerce   appeared first on Cross-Border Magazine.

On February 12, 2025, the European Parliament approved significant reforms to the Value Added Tax (VAT) Directive. The reforms aim to modernize tax regulations in response to the evolving digital economy. They were passed with a substantial majority, with 589 votes in favor, 42 against, and 10 abstentions.

Key Aspects of the VAT Reform

1. VAT Liability for Online Platforms
   By 2030, online platforms will be required to pay VAT for services provided through them, particularly in cases where individual service providers do not charge VAT. This measure addresses market distortions, ensuring that services offered via digital platforms are taxed similarly to those in the traditional economy. The reform primarily targets sectors like short-term accommodation rentals and road passenger transport, where such disparities have been most pronounced.
   
2. Digitalization of VAT Reporting
   The reform mandates fully digitalizing VAT reporting obligations for cross-border transactions by 2030. Businesses must issue electronic invoices for cross-border business-to-business transactions and automatically report this data to their respective tax administrations. This initiative aims to enhance tax authorities' ability to combat VAT fraud effectively.
   
3. Enhancement of the VAT One-Stop Shop (OSS)
   The reforms expand the scope of the online VAT One-Stop Shop to simplify administrative processes for businesses. This enhancement allows more businesses engaged in cross-border activities to fulfill their VAT obligations through a single online portal, streamlining compliance and reducing the administrative burden.
   

Anticipated Benefits

• Revenue Recovery for Member States
  The European Commission estimates that these reforms will enable EU member states to recover up to €11 billion annually in lost VAT revenues over the next decade.
  
• Cost Savings for Businesses
  Businesses are expected to save approximately €4.1 billion per year in compliance costs and €8.7 billion in registration and administrative costs over ten years, making cross-border operations more efficient and less costly.
  

Background and Implementation Timeline

This update to the VAT rules has been over two years in the making. On December 8, 2022, the European Commission presented the 'VAT in the Digital Age' package (ViDA package), consisting of three proposals, including the update to the VAT directive 2006.

The approved reforms will be implemented progressively, with full adoption expected by 2030. This phased approach will allow businesses and tax authorities ample time to adapt to the new requirements and systems.

In summary, the European Parliament's recent approval of VAT reforms marks a pivotal step toward modernizing tax regulations within the EU, aligning them with the digital economy's demands, and fostering a fairer and more efficient tax environment for both businesses and member states.

The post EU VAT Reform: Key Aspects + Implementation Timeline appeared first on Cross-Border Magazine.

Starting a business in a different country is never easy. One of the requirements for Switzerland is that you have to be a Swiss resident, or have a Swiss legal entity or have a Swiss partner. It is also essential that you understand the legal structure.

Taxes for online retailers

In order to directly charge the Swiss VAT to Swiss customers, a foreign online retailer will have to be declared as a VAT-registered company in Switzerland. To achieve this, they will need fiscal representation there.

Being registered as an online shop for VAT purposes, without a permanent establishment but through fiscal representation, has the following consequences:

• The delivery is viewed as domestic and is therefore subject to the domestic tax for the supplier.
• The foreign online merchant will be considered as an importer and must pay the import tax accordingly. The standard 7.7% will be invoiced to the domestic customer as it would be for a normal Swiss company.

Value-added tax

When registering for VAT purposes, online merchants must indicate that they will act as an online retailer. They will also have to comply with being published on the list, which avoids complaints and burdens from customers.

Import tax

The standard tax rate in Switzerland is 7.7% at the moment, which is the same as on domestic purchases. Daily necessities, or basic needs such as food, are subject to VAT at the rate of 2.5%.

Import taxes can be claimed as an input tax, under certain conditions, which is the opposite of customs duties. If it is not possible to pay monetary value when importing an item, the import tax will be based on the market value of the product. The day before declaration, foreign currencies will be converted into Swiss Francs at the exchange rate of that moment.

Customs

Every import needs (at least) one invoice, which has to contain the following information: name and address of the exporter and importer, delivery address, place and date of issue, marking, number, quantity and type of packages, net and gross weights, dimensions of the packages, exact description of goods, preferably with customs tariff number, quantity, price, delivery and payment terms and finally,  country of origin.

Essential for import is the customs tariff number, which is used to classify a product. These numbers are established through custom duties, and import duties are determined based on this number as well.

Download the full whitepaper on Swiss e-commerce, taxes and duties below. Read a complete interview with Gerrit Schröder from GJS Consulting in the latest instalment of Cross-Border Magazine. 

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The post Crossing the Swiss border: changes, customs and taxes in a fast-growing market appeared first on Cross-Border Magazine.

It is yet unclear which sellers in concerns, but for now, these merchants are unable to sell their goods. The problem is that they basically import containers from China, stock these goods in Amazon.de warehouses and directly sell to the end-consumer. Even though German demands are clear, do not pay VAT and goods are not exanimated on hazardous substances or other European safety regulations.

On another note: Amazon is currently planning on opening physical stores in Germany, similar to those opened in the USA. It is yet unclear exactly when this will happen.

The post Germany steps up against tax-fraud on Amazon.de appeared first on Cross-Border Magazine.

Why?

The ultimate purpose of VAT/GST is to impose a broad-based tax on final consumption by households. Typically, VAT/GST is collected through a staged process, which means that each business in the supply chain charges VAT/GST to its customer, regardless of whether the customer is a private individual or a business. In that sense, businesses serve as unpaid tax collectors for the government. They pay to the competent tax authorities the VAT/GST which they charged on their supplies and received from their customers. Since it is not the purpose of VAT/GST to tax businesses, VAT/GST systems employ mechanisms for relieving businesses of the burden of the VAT they pay when they acquire goods or services.

Two methods

Basically, there are two methods to achieve a neutral result for businesses. The first one is the so-called “invoice-credit method”. In this methodology, each supplier in a supply chain charges VAT on each of its supplies. This amount is shown on the invoice to the customer. In his turn, the customer can credit that input tax against the output tax charged on his supplies if he is legally a business as well. Then, the customer remits the balance of the input and the output tax to the tax authorities. He receives a refund if there are excess credits.

The second method is the "subtraction method", which is effectively an accounts-based method. However, this method is not used that often as almost all jurisdictions that employ a VAT use the invoice-credit method. As a matter of fact, within the Organization for Economic Co-operation and Development (OECD), only Japan uses the subtraction method.

For more information on VAT/GST and other ecommerce related topics, please visit the Online Taxes & VAT topic on EcommerceWiki.

The post The different rules on taxations when trading cross-border appeared first on Cross-Border Magazine.