Discusses pricing formula and other fees, value-added tax (VAT), etc.
Last Published: 8/15/2019

Italian importers generally prefer price quotes on a CIF or CIP basis, since they are usually familiar with the Italian customs charges and value-added taxes levied on the product at the time of importation, but may not be familiar with U.S. costs for trucking, ocean, or air freight. Large Italian firms and department stores, however, may prefer to buy on other terms when they arrange for the shipping and insuring the goods. Quotes and invoicing are usually in terms of the currency of the selling country.

Sales made on cash terms call for payment before delivery, on delivery, or shortly thereafter, typically within 10 days from the date of delivery.  A two to five percent discount is given for payment of the full amount of the transaction at the end of the specified period from one to four months from the date of the invoice.  The length of the period depends on the commodity involved, the credit standing of the buyer, and the marketing and sales objective of the seller. A period of up to two years is often allowed for payment of capital goods, store equipment, trucks, and similar heavy equipment.

Italian firms indicate that some U.S. suppliers are too rigid in their payment terms and have thus lost business to other suppliers. Financing is as much a competitive factor as the product itself, the delivery date, or after-sales service.  While some U.S. manufacturers request payment upon receipt of the goods, more successful sellers offer terms allowing settlement of the account from 60 to 120 days following the invoice date, which is the most common practice in Italy. U.S. firms should note that Italians can be slow to pay.

The use of irrevocable letters of credit for the Italian market has declined appreciably in recent years.  Although U.S. exporters sometimes require such instruments, especially when the Italian customer's credit reputation is not well known, the growing reluctance of Italian firms to provide letters of credit has required U.S. exporters to turn to other methods to assure payment or lose the sale to other suppliers in the competitive Italian market.  The Italian businessperson is reluctant to pay a high fee for a letter of credit when other suppliers or means of payment are available.  U.S. firms are increasingly using the export credit insurance and guarantee programs available through the Export-Import Bank of the United States (Ex-Im Bank), the Foreign Credit Insurance Association (FCIA), Fidelity & Deposit, the Overseas Private Investment Corporation (OPIC), American International Group – AIG Global & Political Risk Insurance Co. (AIG), Multilateral Investment Guarantee Agency (MIGA) and other export credit insurers.

Quotes and Payment Terms

The Italian buyer may request a quote or shipment of goods under other INCOTERMS (International Commercial Terms). This is a set of international rules defining the important commercial terms and practices.  By referencing INCOTERMS in contracts or invoices, both buyer and seller will have a uniform understanding of their responsibilities in an agreement.  You can find copies of the 90-page publication, Guide to INCOTERMS from ICC Publishing, 156 Fifth Avenue, New York, NY 10010, (212) 206-1150. Exporters can also obtain information from the International Chamber of Commerce website: http://www.iccwbo.org/ or from Dun & Bradstreet Exporters' Encyclopaedia.

The Italian importer may examine the merchandise for inventory purposes before customs clearance.  Goods cannot clear customs without shipping documents and payment of any required customs duty, applicable value-added taxes and excise taxes. The importer must undertake these formalities at the time of clearing customs. The importer should present import licenses, if required, within the period for which they were issued.
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.