Update on Italian Fixed Establishment’s Role in Intra-Community Goods Supply and VAT Implications

• The place of supply for services is determined by the location of the fixed establishment if it is involved in the supply.
• A fixed establishment is involved if it uses its technical and human resources for the supply.
• Italian tax authorities ruled that a German headquarters’ Italian fixed establishment was involved in a supply of goods to an Italian customer.
• This involvement led to an intra-Community transfer of goods and a supply subject to VAT in Italy.
• A German company, A, has a fixed establishment in Italy and a local employee who supports product development and marketing.
• The employee is not involved in contract negotiations or management activities.
• A sought clarification from Italian tax authorities on whether its fixed establishment was involved in the supply of goods to an Italian company, B.
• Italian tax authorities confirmed that VAT treatment depends on the fixed establishment’s involvement in the supply.
• A fixed establishment can be the recipient and liable for VAT on intra-Community acquisitions if significantly involved.

Source: kmlz.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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