Indirect tax ebook - Italy

Filing 

Resident companies

General
All taxpayers are required to file an annual VAT return either electronically or through authorized intermediaries by the end of September following the year the return refers to.

The annual return permits the final settlement of the taxpayer’s VAT payable or receivable. It consists in disclosing the algebraic sum of all the transactions (both sales and purchases) carried out all through a solar year. It permits to establish the turnover and, therefore, whether to benefit from some simplifications for the following year. Finally it usually serves as the basis for the Tax Authorities’ assessments.

Moreover, the taxpayer must, file a VAT settlement of the previous FY by the end of February. This settlement has not the same value as a return.

Periodic VAT returns and settlements
No additional regular returns are provided. However, all taxpayers (save some exceptions) are required to determine their VAT position before the Tax Authorities on either a monthly or a quarterly basis and to comply with the regular settlement obligation. Should the taxpayer’s position be a debit position, the taxpayer is required to pay its VAT payable. On the contrary, should a VAT credit results from the VAT calculation, the VAT receivable will have to be deducted from the following computation.

Taxpayers with a limited turnover (below € 309,874.14 if they supply services or € 516,456.90 if they sell goods) can opt for quarterly computation provided that they increase the tax amount due by 1%.

The other taxpayers must determine their VAT debit or credit through regular computations to be effected on a monthly basis by the 16th day of the following month.

Importers
VAT is levied on importation of goods into the Italian territory. Every person importing goods will be responsible to pay VAT, in principle, when filing the import declaration.

These are transactions of goods imported into the Italian territory (i) from extra-EU countries (or from territories that are not under the Italian government, i.e. Livigno and Campione d’Italia) or the EU; or (ii) that have not been already circulating in another member state.

New means of transport
The sale of new means of transport are not subject to VAT in Italy as VAT is levied in the EU destination country. The purchase of new means of transport are always and in any case subject to VAT in Italy although the seller or the buyer or both of them are not taxpayers but only private end-users.

Foreign taxable persons

These are the guidelines as to foreign taxable persons: 1) should the non-resident taxpayer have carried out business through a fiscal representation, the relevant return of the foreign taxpayer is filed by the fiscal representative autonomously; 2) should the resident taxpayer have carried out business through a permanent establishment, the return of the non-resident person must be filed along with the Unico form (which also includes the income tax returns) by the permanent establishment of the foreign taxpayer; 3) should the non-resident taxpayer be directly identified, the return must be filed autonomously by the identified taxpayer.

Recovery of VAT / negative VAT return

By ‘VAT credit that can be offset’ we mean the credit stated in the prior annual or mid-term return, not asked for refund, generated on a quarterly basis, for which some specific requirements are met and for which a special form must be filed and a special procedure must be implemented. The VAT credit stated in the annual return can be 1) asked for refund under some special requirements; 2) offset against other entries; 3) carried forward in the VAT ledgers on regularly calculating the VAT.

The EU operators that are not identified in Italy for VAT purposes and have not performed any supply within the State territory (except for some transactions) are entitled to ask for the refund of the VAT paid in Italy.

This benefit also applies to non-EU resident taxpayers, as provided by the XIII Directive.

Sales lists / VAT information exchange system

For the purpose of non-liability of intra-EU sales, the Italian supplier is required to show the EU VAT number of the customer on the sale invoice. Should any related irregularity arise during an assessment, in principle the Italian transferor will be held responsible for failure to debit the VAT. However, no allegation can be charged to the latter in the event that he/she addressed a query to the Revenue Office and received confirmation of the validity of the transferee’s VAT number.

The supplementary statistical return declaration is a monthly, quarterly or annual (depending on the level of intra-Community supplies or purchases made) return, detailing all movements of goods between Italy and other EU states. In Italy the sales listing (VIES) and statistical reporting (INTRASTAT) forms have been combined and are now known collectively as INTRASTAT.
The statistical information is required from persons who make intra-EU supplies or purchases, and different limits apply separately for supplies and purchases.
The information is required on almost all types of transactions, whether commercial or not, which lead to a movement of Community goods from one member state to another.

Register

For the goods that are transferred from an EU country to another with no transfer of ownership, a special register of load and release of stock will have to be kept, in which to register the import and export of goods into and out of the Italian territory. This is a special register in that it must be kept only to track the movements of EU goods in and out of the Italian territory as well as of Italian goods sent over to another EU country.

Intrastat

The Intrastat listing will report all the sales or purchases of registered goods or of goods under registration over the reference period (month, quarter or year) divided by types of transactions referred to the same taxpayer.

For intra-EU purchases of goods, Intra 2 forms must also report the time of receipt of the foreign invoice, which cannot be later than the month following the performance of the transaction, corresponding with the actual delivery of the goods. For intra-EU sales of goods, Intra 1 forms must report the transactions either registered or under registration for each period.

No intra-EU services must be reported in the Intrastat forms except for manufacturing, processing and repairs which must be filled in only for statistical purposes (if said forms are submitted on a monthly basis).

The Intrastat lists must be lodged at the authorized Customs offices.

Penalties

Administrative penalties

The main administrative penalties can be summarized as follows.

• Failure to submit annual return or submission of return more than 90 days after the deadline, when taxes are owed: penalty between 120% and 240% of the total tax owed with a minimum of € 258.
• Failure to submit annual return or submission of return more than 90 days after the due date, when taxes are not owed: penalty between € 258 and € 2.065. 
• False declaration: return in which the amount of tax indicated is less than that which is due, or in which the deductible or reimbursable amounts are higher than those claimable: penalty between 100% and 200% of the increased tax and/or of the credit difference.
• Request for reimbursement which differs from that of the return and thus for a higher amount than it appears on the return: penalty of between 100% and 200% of the amount which is not due. 
• Form filled in incorrectly according to the administrative regulations. Omission of information or incorrect information for the identification data of the taxpayer or his agent; for the calculation of the taxes or for anything else which is necessary regarding the carrying out of checks: penalty from € 258 to € 2.065. 
• Tax payment violations: failure to pay, late payment or insufficient payment of VAT on account, of VAT resulting from periodic payments or of adjusted VAT resulting from the annual return: penalty of 30% of the unpaid amount.
  
  

Criminal penalties
Criminal penalties are provided in a limited number of cases if the Italian Tax Authority proves that the behavior of the taxpayer is fraudulent; there may be evasion of VAT liabilities or overstatement of VAT credits by, for example, the violation of accountancy rules, use of counterfeit documents and invoices, the hiding and the destruction of accountancy records. Penalties may vary from six months to six years’ imprisonment depending on the amount of tax evaded or tax credit unfairly claimed. However, in most cases imprisonment will not apply where the amount of tax evaded or tax credit unfairly arising from the fraudulent behavior does not exceed € 77.468,53; other mitigating circumstances are also provided. 

Small traders

There are several administrative simplifications relating to invoicing, record keeping and payment of tax which apply to small enterprises or 'minor taxpayers'.

Minor taxpayers are defined as taxpayers with a turnover not in excess of € 309.874,14 for suppliers of services and € 516.456,90 for suppliers of goods.

Taxpayers who supply both goods and services must apply the lower threshold for services, unless they maintain separate accounting records for their separate activities.

• Introduction
• Scope
• Registration
• Tax rates
• Reporting & filing
• General tax application/Time of supply