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Innovations in Italy
In Italy, since July 2021, there are some new rules and regulations regarding VAT. Among other things, it is about how VAT is applied to loyalty programs or also to what extent taxes that were paid in error can be refunded.
Shared payment services
According to the Italian tax authorities, shared payment services are treated as financial services and are therefore exempt from VAT without credit. This decision can be found in Article 10(1)(1) of the Italian VAT Act.
Requirements for access to existing VAT groups
The Italian tax authority has determined that companies can become part of an existing VAT group.
Condition: Financial connection to the companies already present in the group
However, the connection does not have to exist at the time of establishment, it can be fulfilled later. For the inclusion of a new company in the VAT group, the declaration for the condition must be submitted within 90 days (is calculated from July 1 of the year).
New one-stop store and import one-stop store regulations
Since July 1, 2021, the Operational Center of Pescara is the competent body for OSS and IOSS regulations and activities. On the other hand, the Commissione Tributaria Provinciale di Pescara is the competent court that handles the disputes.
Refund procedure for VAT invoiced in error for supplies subject to the split payment mechanism
If the supplier, as the sole taxable person, has erroneously charged its customer a higher VAT, it may recover this error by means of a credit note, which must be issued to the customer within one year from the date of delivery. If this deadline is not met by the supplier, the amount will be refunded. If the purchaser is a public or taxable entity, the latter is obliged to settle the deduction of the erroneous tax.
Refund procedure in case of incorrect application of the reverse charge procedure
If a taxable person violates Directive 2009/9/EC, which regulates the reverse charge, the taxable person may still claim the VAT refund in Italy. This is true even though the condition for this claim is that the claimant may only supply services that are subject to VAT by applying the reverse charge mechanism in the relevant Member State.
If the reverse charge is applied incorrectly, the application of VAT is frozen if there is no fraud. The parties concerned do not have to correct or reissue the invoice.
Innovation: Transmissions of foreign transactions
via Sistema di Intercambio (SdI)
As of January 01, 2022, transactions with foreign companies will also be processed via the Sistema di Intercambio (Sdl). The Esterometro Report will then no longer be required.
Companies that have a branch in Italy or are registered with the Italian tax authorities are affected. Companies must be fully committed to the Sdl platform.
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Muzaffer Havcarci
INPOSIA e-Invoicing-Specialist
