Yes: an Italian Merch on Demand creator with a partita IVA in the ordinary scheme can deduct the 22% VAT on Amazon ads. Unlike a book on KDP, a Merch licence is not the author's copyright licence that Italian VAT law leaves outside VAT: it is a taxable service supplied to Amazon abroad, which keeps the right to deduct. In the forfettario scheme, or without a partita IVA, the 22% is lost: on 1,000 € of ads a month, 2,640 € a year.
This page is for Merch on Demand creators living in Italy who advertise their products with Amazon Ads. It is based on Italian law as in force in October 2026 (Normattiva), the Agenzia delle Entrate's rulings and Amazon's Merch terms. It is information, not tax advice.
Your own figures: Amazon Ads VAT calculator, Italy preselected.
Can you deduct the 22%?
| Your situation | Deduct the 22%? |
|---|---|
| No partita IVA | No |
| Partita IVA, forfettario | No |
| Partita IVA, ordinary scheme | Yes |
Merch ads in brief
- They open by invitation. Amazon is rolling them out "gradually" to the Merch community and emails the accounts that become eligible (Promote Your Merch).
- One advertising account covers six marketplaces: the US, the UK, Germany, France, Italy and Spain.
- They are Sponsored Products campaigns, for your Merch products only.
An advertiser in a VAT country who has not given a VAT number is charged VAT on the advertising fees, on amazon.com too (Amazon Ads help). Giving one does not make the tax go away; it only changes who accounts for it. The question is whether you can deduct it.
Why the VAT on your ads is deductible
- What Italian law leaves outside VAT. Article 3, fourth paragraph, letter a) of DPR 633/1972: "Non sono considerate prestazioni di servizi: a) le cessioni, concessioni, licenze e simili relative a diritti d'autore effettuate dagli autori". That is why a KDP author cannot deduct.
- The Agenzia reads that exclusion strictly. In its ruling n. 540 of 12 November 2020, it is "riferita unicamente alle opere tutelate dal diritto d'autore ai sensi della legge 22 aprile 1941, n. 633", and it "non è suscettibile di interpretazione estensiva". Designers paid a royalty on every product sold were found to supply a service "soggetta ad Iva".
- Your Merch licence is not that. The ruling looked at the contract, and so
should you:
- the Merch agreement never mentions copyright: you grant Amazon a "right and license" on your "Content", which it defines as "media, art, logos, trademarks, trade names, models, design specifications" (Services Agreement);
- a Merch design is made to be printed in series on t-shirts, mugs and cases. Such a design is protected by copyright only if it has "carattere creativo e valore artistico" (Law 633/1941, article 2, n. 10), and the Supreme Court places these works in the design of "un oggetto destinato a una produzione seriale" (Cassazione 7477/2017, cited in the ruling).
- So you supply a taxable service, located abroad. A service to a business is taxed where that business is established (article 7-ter): your royalties carry no Italian VAT.
- And the deduction stays open. Article 19, paragraph 3, letter b) keeps it for transactions "effettuate fuori dal territorio dello Stato le quali, se effettuate nel territorio dello Stato, darebbero diritto alla detrazione dell'imposta". In Italy, your licence would be taxable.
- The credit is refundable. You deduct VAT without charging any, so you build a VAT credit. Article 30 lets you claim it back with the annual return when you mainly carry out transactions outside Italian VAT under articles 7 to 7-septies.
If your designs are drawings with real artistic value, the Agenzia could treat them like an author's books: an interpello ordinario gets its answer for your own case, within 90 days, and its silence counts as agreement with the solution you proposed.
What it takes: the ordinary scheme
- The forfettario scheme never deducts. Forfettari "non hanno diritto alla detrazione" of the VAT on their purchases (Law 190/2014, article 1, paragraph 58).
- Opting for the ordinary scheme binds you for three years. The option is "valida per almeno un triennio" (paragraph 70).
- It also ends the forfettario's flat income tax of 15% (paragraph 64). Do that sum with your accountant before you opt: the VAT you get back has to beat it.
Example: Marco, Merch creator, 1,000 € of ads a month.
| Forfettario | Ordinary scheme | |
|---|---|---|
| Ads | 1,000 € | 1,000 € |
| VAT at 22% | 220 € | 220 € |
| VAT deducted | 0 € | 220 € |
| Real cost a month | 1,220 € | 1,000 € |
Over a year: 14,640 € against 12,000 €, a 2,640 € difference before your accountant and the income tax change.
Check who pays you on your Merch statements
The Merch agreement is signed with Amazon.com Services LLC, and each royalty is paid by "the responsible Amazon Party". It does not name the company that pays the European royalties, and it says your royalties are "inclusive of any taxes". If a statement shows an Amazon company established in Italy, your licence would be an Italian transaction: show it to your accountant first.
If you also publish books, the answer for your KDP royalties is different: Italian KDP authors and the 22% VAT on Amazon ads.
The law changes its numbers on 1 January 2027. DPR 633/1972 is replaced by the consolidated VAT text (Legislative Decree 19 January 2026, n. 10): ask your accountant for the new article numbers before filing anything after that date.
Check your own figures with the Amazon Ads VAT calculator for Italy.
Sources
- DPR 633/1972, article 3 (author's licences outside VAT), Normattiva
- DPR 633/1972, article 7-ter (place of supply of services), Normattiva
- DPR 633/1972, article 19 (deduction), Normattiva
- DPR 633/1972, article 30 (refund of the VAT credit), Normattiva
- Law 633/1941, article 2 (protected works), Normattiva
- Law 190/2014, article 1, paragraphs 54 to 89 (forfettario scheme), Normattiva
- Ruling n. 540 of 12 November 2020 (design licence taxable), Agenzia delle Entrate
- Interpello ordinario, Agenzia delle Entrate
- Legislative Decree 19 January 2026, n. 10 (consolidated VAT text from 2027), Normattiva
- Amazon Merch on Demand Services Agreement (updated 7 June 2024), Amazon Merch on Demand
- Promote Your Merch, Amazon Merch on Demand
- Value Added Tax (VAT) on Electronically Supplied Services, Amazon Ads
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