Tax is an issue if you are planning to set up a business or work on a self-employed basis in Italy. Even the smallest companies will pay this tax though how much depends on which region your business is in. The basic rate is approximately 4.25%. Businesses also need to become familiar with IVA (VAT) and the codice fiscale (similar to the social security number). IVA (Imposta sul valore aggiunto) rises in stages from 4% to 10% to 20%. Standard rate is 20% for clothes, food is 10%.