Principios Contables y Normas de Valoración Aplicados

Yes, it may be possible to reclaim the VAT incurred in certain circumstances.

Two schemes exist, one or businesses established in the EU and another for businesses established elsewhere.

The EU cross border refund scheme is available in all EU member states, and enables a business established in an EU country to recover VAT incurred in another member state. To be eligible to make a claim, the claimant must be a taxable person established in an EU member state other than the one from which the claim is to be sought. In addition, the claimant: • must not be registered, liable, or eligible to be registered in

the member state from which he is claiming the refund • must have no fixed establishment, seat of economic activity,

place of business or other residence there

• during the refund period he must not have supplied any goods or services in the member state of refund, apart from certain limited exceptions.

The amount that is refundable is determined by the deduction rules that apply in the country making the refund. The claim is submitted electronically to the tax authority from whom the repayment is being sought.

The refund period must not cover more than one calendar year or less than three calendar months – unless it is covering the remainder of a calendar year. The claim has to be made by 30 September of the year following that in which the VAT was incurred.

Businesses established outside of the EU can, subject to certain conditions, also reclaim the VAT incurred on imports in Italy or purchases of goods and services pertaining to their activity. The scheme is available to any person carrying on a business established in a third country ie outside the EU, provided that in the period of the claim:

• he was not registered or liable to be registered for VAT in Italy

• he was not established in any EU country

• he made no supplies of goods and services in Italy other than certain specified exceptions

• where he is established in a third country having a comparable system of turnover taxes, unless the Italian tax authority allows otherwise, that country provides reciprocal arrangements for refunds to be made to taxable persons established in Italy.

The claim has to be made by 30 September of the year following that in which the VAT was incurred.

What information must a VAT invoice show?

A VAT invoice, pursuant to Article 21, paragraph 2, Presidential Decree 633/1972, contains the following information:

• the issue date

• progressive number which identifies it in a univocal manner • company’s name or corporate name, name and surname,

residence or domicile of the seller or supplier, the tax representative as well as the location of the permanent establishment for non-resident persons

• VAT number of the seller or supplier

• company’s name or corporate name, name and surname, residence or domicile of the seller or supplier, the tax representative as well as the location of the permanent establishment for non-resident persons

• VAT number of the seller or supplier or, in case of taxable persons established in another Member State of the

European Union, the VAT identification number attributed by the Member State of establishment; in case the seller or supplier resident or domiciled in the territory of the State is not engaged in the furtherance of the business, trade or professional activities, tax code

• nature, quality and quantity of the goods and services concerned by the transaction

• considerations and other data needed to determine the taxable amount, including the data related to the goods transferred with a discount, premium or allowance under Article 15, first paragraph, no. 2

• considerations related to the other goods transferred with a discount, premium or allowance

• rate, amount of the tax and taxable amount with rounding up to the euro cent

• date of the first vehicle matriculation or registration in the public registries and number of kilometres travelled, hours sailed or flown, if it refers to intra-Community supply of new means of transport, pursuant to Article 38, paragraph 4, of Decree-law N° 331 of 30 August 1993, converted, with amendments, into Law N° 427 of 29 October 1993

• annotation that the same is issued on behalf of the seller or supplier, by the buyer or the client or by a third party.

The invoice should be issued also for the other types of transactions and it contains, in place of the amount of the tax, the following notes with the indication of the relevant community or national regulation:

• supplies related to goods in transit or deposited in locations subject to customs surveillance, not subject to tax pursuant to Article 7-bis, paragraph 1, with the annotation ‘not subject to taxation’

• non-taxable transactions under Articles 8, 8-bis, 9 and 38-quarter, with the annotation ‘non-taxable transaction’ • exempt transactions under Article 10, except for those stated

under no. 6) bearing the annotation ‘exempt transaction’ • transactions subject to the margin scheme provided for by

Decree-law N° 41 of 23 February 1995, converted, with amendments, into Law N° 85 of 22 March 1995, bearing the annotation, depending on the case, ‘margin scheme – second-hand goods’, ‘margin scheme – works of art’ or ‘margin scheme – antiques or collectors’ items’

• transactions carried out by travel and tourism agents subject to the regime under Article 74- ter, bearing the annotation margin scheme – travel agencies.

A simplified VAT invoice can be issued where a business makes retail sales and makes a sale of goods or services for an overall amount not exceeding €100.

VAT invoices can be issued, received and stored in electronic format. Pursuant to article 21, paragraph 1, Presidential decree 633/1972, electronic invoicing means the invoice that was issued and received in any electronic format; the use of electronic invoicing is subject to acceptance by the recipient. Invoicing either on paper or electronic, by the client or a third party resident in a country with which there are no legal instruments to regulate reciprocal assistance, is allowed provided that prior notification is given to the revenues agency and that the national taxable person has commenced the activity at least five years before and that he has not received in the previous five years, notifications of tax proceedings or disputes for substantial violation as regards VAT. The method, contents and electronic procedures of the notification is determined by regulations of the revenue agency director. The invoice, on paper or electronic, is intended to have been issued at the time of its delivery, dispatch, transmission or when made available to the supplier or customer.

For further information on indirect tax in Italy please contact:

Gabriele Labombarda T +39 02 76008751

E [email protected]