5 Major Developments in Italy

5 Major Developments in Italy

• Italy Extends Reduced VAT Rate for Natural Gas
• Italy-San Marino exchanges: the technical stop does not interrupt the operation
• New decree law approved for containment of energy costs: 5% VAT rate for methane gas supply will be extended
• Proposal Council Regulation: Italy to extend the authorisation of the derogation to apply split payment
• Italy Wants To Become the First Country to Exempt NFTs from VAT

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Bookkeeping

• Ruling 304: Recall and replacement of defective systems – Documentation accompanying goods and disposal/destruction procedure

Brexit

• UK VAT groups not recognized beginning 2021

• Ruling 314: How Brexit impacts branches belonging to a VAT group in the United Kingdom

Composite Supply

• In the packs with multiple goods, the highest VAT rate prevails

• Italy’s different approach to composite supplies

Consignment Stock

• The call-off stock regime is not applicable in case of triangular intra-community transactions

Cryptocurrency and NFT

• Italy Wants To Become the First Country to Exempt NFTs from VAT

• Revenue agency seeks feedback on draft circular for taxation of crypto assets

• Ministry Extends Deadline for Crypto-Asset Tax Payment

• Ministry Extends Deadline for Crypto-Asset Tax Payment

Customs

• Further guidance needed on transfer pricing adjustments and customs valuations in Italy

DAC7

• New decree implements EU Directive for Automatic Financial Account Information Exchange for digital platform operators

• New decree implements EU Directive for Automatic Financial Account Information Exchange for digital platform operators

Deduction (Input Tax Credit)

• VAT credit cannot be denied for formal reasons

• Flashback on ECJ Cases – C-377/08 (EGN) – Input VAT deduction if supplies are made to other Member States

• Payback on medical devices: how to segregate and calculate recoverable VAT

• Ruling 334: Purchase and management of “litigious assets” – VAT regulations

• VAT Deductibility in Leveraged Buyout Mergers: AIDC’s Analysis of VAT Deductibility in SPV’s Purchases

• Input VAT deduction for goods belonging to someone else

• Court of Cassation: Input VAT deduction of “rurality” of properties in Italy

• Court of Cassation: Distinction between advertising expenses and representation expenses for VAT

• ‘Uneconomical VAT’ is non-deductible

• Updated VAT TR form for the refund of quarterly credits

• Italy announces draft legislative framework for major tax reform

• VAT deduction on importation

• For the VAT deduction there is time until the presentation of the annual return

• VAT reimbursement to non-EU companies: reciprocity essential!

• Incorrect application of VAT in the invoices issued: deduction and applicable sanction

Distance Sales

• Ruling 299: “Abnormal” refund for undue VAT on EU distance sales

E-Commerce / Electronic Services

• IBFD Article: Digital Zero-Price Market – VAT Consequences

• The “anomalous” refund can be used to recover VAT erroneously paid in Italy on distance sales relevant abroad carried out until 30 June 2021

E-invoicing

• E-Invoicing Requirements in Italy (Easy Checklist)

• Country fact sheets: eInvoicing in Italy

• New API Management platform for free access services

ECJ (European Court of Justice)

• Flashback on ECJ Cases – C-377/08 (EGN) – Input VAT deduction if supplies are made to other Member States

• Ruling 322: VAT treatment applicable to live erotic entertainment and communication services via internet site

• Ruling 301: Substitute services for company canteens – treatment for VAT

EU Policy

• Proposal Council Regulation: Italy to extend the authorisation of the derogation to apply split payment

Exemption

• Another postponement for VAT on non-profit

• Italian military bases hosting US personnel in Italy are considered Italian territory

• Italy Wants To Become the First Country to Exempt NFTs from VAT

• VAT exemption for associations has been postponed to 1 July 2024

• Rental of a boat for saving in the sea not taxable for VAT purposes

• Ruling 334: Purchase and management of “litigious assets” – VAT regulations

• Court of Cassation rules about VAT exemption for investment gold

• Ruling 321: Provision of teacher staff is taxable for VAT purposes

• The “written statement” for the presumption to exempt intra-EU sales with transport arranged by the acquirer can be submitted to the vendor via an EDI system

• Shares to employees of subsidiaries are exempt from VAT

• Italy Clarifies VAT Treatment of Supplies to Armed Forces

• Italy announces draft legislative framework for major tax reform

Export

• Italy-San Marino exchanges: the technical stop does not interrupt the operation

Fiscal Representation

• Ruling 299: “Abnormal” refund for undue VAT on EU distance sales

Fixed Establishment

• Italian Revenue Agency issues ruling on VAT fixed establishment intervention

• Supreme Court: Non-residents can claim VAT via representatives, even in the presence of a permanent establishment in Italy

• Legal Principle No. 11/2023: Transactions between “Italian” fixed establishments of companies belonging to a foreign VAT group

• UK VAT Group: VAT treatment of transactions between Italian and UK permanent establishments

• Ruling – VAT implications of an Italian branch of a Luxembourg-based asset management company

• Ruling 336: Tax debtor for VAT purposes – Direct intervention of the Italian permanent establishment

• CFE Opinion Statement on a Ruling of the Italian Central Tax Office on Intervening Fixed Establishments in a VAT Context

Flat Rate Schemes

• Ruling 295/2023: VAT rate applicable to protein bars and preparations in powder with a high protein content

Fraud / Tax Evasion

• Italy authorized to continue split payment mechanism until June 2026

• Italy: EPPO arrests suspected ringleader of €28 million VAT fraud scheme

• Reverse Charge for laptops excluded in the retail sale phase

• False VAT numbers that have been automatically terminated will be reported by a web application

• New rules regarding controls related to the allocation of a VAT number to individuals

• Issuing false invoices for third party VAT evasion

Importation

• Italy-San Marino exchanges: the technical stop does not interrupt the operation

• importer’s exclusive responsibility for unpaid import VAT upheld by Cassation

• Italian military bases hosting US personnel in Italy are considered Italian territory
• VAT deduction on importation

Intra-Community Transactions

• The call-off stock regime is not applicable in case of triangular intra-community transactions
• The “written statement” for the presumption to exempt intra-EU sales with transport arranged by the acquirer can be submitted to the vendor via an EDI system
• Ruling 299: “Abnormal” refund for undue VAT on EU distance sales

Invoice

• VAT credit cannot be denied for formal reasons
• Issuing false invoices for third party VAT evasion
• Incorrect application of VAT in the invoices issued: deduction and applicable sanction

Liability (Reverse Charge/Withholding)

• Italy authorized to continue split payment mechanism until June 2026

• Application of Split Payment VAT for Gifts and Free Services: Italian Regulation Explained

• Reverse Charge for laptops excluded in the retail sale phase

• A new go -ahead from the EU for the split payment is coming

Place of Supply

• Place of supply rules for leasing, renting, and chartering of pleasure boats

• Ruling – VAT implications of an Italian branch of a Luxembourg-based asset management company
• Ruling 336: Tax debtor for VAT purposes – Direct intervention of the Italian permanent establishment

Rate

• Italy Extends Reduced VAT Rate for Natural Gas

• Italy extends gas VAT cut to 5% until 30 Sept 2023

• Ruling 363: VAT rate for slicing services for cured meats

• Ruling 362: Reduced VAT rate to a dietary product.

• New decree law approved for containment of energy costs: 5% VAT rate for methane gas supply will be extended

• Clarification on VAT rate for dietary product classification

• Exclusion of sliced and packaged cured meats from reduced VAT rate

• International VAT Rate Round Up: May 2023

• Rulings 312 and 313: VAT rate for fruit juice based on puree

• Ruling 360: VAT Rate for Sales and Leases of Rolling Stock

• Ruling 345: Only medical devices falling under a specific category are eligible for the reduced VAT rate

• Ruling 337: Reduced VAT for supplements classified as “food preparations”

• VAT exemption for investment gold regardless of the format

• In the packs with multiple goods, the highest VAT rate prevails

• Italy Converts VAT Reduction and Tax Credits to Offset Energy Costs into Law

• What can be purchased with the VAT ceiling?

• Ruling 329: Reduced rate for waste batteries and accumulators and recovery of charges for non-VAT collection

• The 5% VAT rate remains for clothing with healthcare purposes

• Rulings 312 and 313: 10% VAT rate does not apply to fruit puree juices

• Ruling 308/2023: Anti-abandonment safety system in cars subject to standard rate

• Food supplements containing cocoa with 10% VAT rate

• Italy announces draft legislative framework for major tax reform

• The reduced VAT rate does not apply to a tunnel giving access to ski resorts

Real Estate/Immovable Property

• Court of Cassation: Input VAT deduction of “rurality” of properties in Italy
• The reduced VAT rate does not apply to a tunnel giving access to ski resorts

Refund

• Supreme Court: Non-residents can claim VAT via representatives, even in the presence of a permanent establishment in Italy

• Ruling 347: Negative Net Equity and VAT Refunds above 30k

• Input VAT deduction for goods belonging to someone else

• Court of Cassation: Only the seller/provider is authorized to request a refund of undue VAT

• How to claim VAT refunds – New model to be used as of April 1, 2023

• The “anomalous” refund can be used to recover VAT erroneously paid in Italy on distance sales relevant abroad carried out until 30 June 2021

• Updated VAT TR form for the refund of quarterly credits
• Ruling 299: “Abnormal” refund for undue VAT on EU distance sales
• VAT reimbursement to non-EU companies: reciprocity essential!

Registration

• Foreign sales of fuel under fuel card contract – VAT rules and obligation to register abroad

Reporting / Compliance

• Global VAT Guide: May 2023 VAT Updates

• International VAT Rate Round Up: May 2023

• Guidance about 2022 VAT corrections/checks

• EY VAT News – 5 June 2023

• Annual VAT return for 2022 can be filed until 31 July 2023

• VAT return due: 90 days for late submission

• Updated VAT TR form for the refund of quarterly credits
• For the VAT deduction there is time until the presentation of the annual return
• New API Management Platform

Split Payment

• Proposal Council Regulation: Italy to extend the authorisation of the derogation to apply split payment

• Proposal Council Decision authorising Italy to extend the period to apply the ‘split payment’ mechanism

Tax Point (When the Chargeable Event Occurs)

• Tax point for payments in advance

Taxable Amount

• The rebate of excise duties on energy products increases the VAT taxable base

• Decree: Payback on medical advices

• The repair and replacement of assets under warranty excludes VAT

• Further guidance needed on transfer pricing adjustments and customs valuations in Italy

• Ruling 329: Treatment of Costs and VAT for Waste of Batteries and Accumulators

• Penalty applied to customers is not always compensation for VAT purposes

• MedTech payback’s tax treatment

• Barter between the sale of lithoid materials and the stream restoration works

• Ruling 293/2023: Sale of lithoid material in compensation of the interventions for the construction of a stream expansion tank defined within the framework of a procurement contract

Taxable Person

• ATI is not a single VAT taxable person

Taxable Transaction

• Legal Principle No. 11/2023: Transactions between “Italian” fixed establishments of companies belonging to a foreign VAT group
• Foreign sales of fuel under fuel card contract – VAT rules and obligation to register abroad

• Skandia principles do not apply in the case of a UK VAT Group

• Penalty applied to customers is not always compensation for VAT purposes

• Sanction for violating the general conditions of parking is subject to VAT

• Ruling 323: Sending the EU replacement assets as part of the warranty it outside scope

• Ruling 323: VAT regulations on repair and replacement of products (and/or their components) under warranty

• Operations outside the scope of VAT: the replacement of defective products

• Ruling 304: Recall and replacement of defective systems – Documentation accompanying goods and disposal/destruction procedure
• Barter between the sale of lithoid materials and the stream restoration works

Tax Authorities / Penalties

• Payment of VAT debt after the crime to be assessed for the new particular tenuity

• Guidance about 2022 VAT corrections/checks

• The access of the Tax Authorities in the office where the accounting records of the taxpayer are kept, is admissible without the presence of the owner of the firm or of his delegate

• Tax amnesty, criminal shield and the new timing

• New API Management Platform

Technology

• New API Management Platform

Territory

• Practical guidance regarding the correct application of VAT in operations between Italy and the Republic of San Marino

TOGC (Transfer of a Going Concern)

• Ruling 315: Sale of a collection of leased motor vehicles does not automatically qualify as a TOGC

Transfer Pricing

• Further guidance needed on transfer pricing adjustments and customs valuations in Italy

Triangulation

• Triangular exports not configurable if the transport is carried out by the first acquirer in its own name and on its own behalf

• The call-off stock regime is not applicable in case of triangular intra-community transactions

VAT Group

• Transactions between “Italian” permanent establishments of companies of a foreign group: when they are relevant for VAT purposes

• UK VAT Group: VAT treatment of transactions between Italian and UK permanent establishments

• Italian Tax Authority rules effects of UK VAT groups not recognized for Italian VAT purposes

• Skandia principles do not apply in the case of a UK VAT Group

• UK VAT groups not recognized beginning 2021

• Italy: UK VAT Groups not Recognized Beginning 2021

• Ruling 314: How Brexit impacts branches belonging to a VAT group in the United Kingdom
• Italy announces draft legislative framework for major tax reform

VAT Identification Number

• False VAT numbers that have been automatically terminated will be reported by a web application
• New rules regarding controls related to the allocation of a VAT number to individuals

• Free (API) access services for the verification of tax code and VAT number

• New API Management platform for free access services

• New API Management Platform

Vouchers

• Ruling 341: VAT Treatment of Vouchers Issued by a Large Retail Company