Prepared by Davide Accorsi, Stefano Luigi Airaghi and Paola Bramato
With the reply to ruling no. 509 dated 26 July 2021, the Italian tax authorities provided clarifications on the deductibility of VAT in case of importations of goods not owned by the importer (on this topic, see also our previous newsalert dated 27 October 2020).
More precisely, in the case commented in the abovementioned reply to ruling, the applicant is a company established in the United Kingdom that intends to introduce goods in Italy with shipment from the United Kingdom to the warehouse of its Italian consignee with whom it entered into a call-off stock[1] agreement, asking the latter to act as the importer of the goods.
In this regard, the applicant company asked the Italian tax authorities to clarify which VAT obligations should be fulfilled in Italy by the applicant company and whether the VAT paid at the time of the importation of the goods owned by the applicant can be deducted by the Italian consignee.
The Italian tax authorities, after having reaffirmed that the person liable to pay import duties and VAT is the one who makes the customs declaration and after having retraced the main decisions of the Court of Justice of the European Union concerning imports made by persons who are not the owners of the imported goods[2], clarified that the “direct and immediate link” between the upstream import and the downstream activity carried out by the importer not owning the goods, necessary in order to be able to exercise the right of deduction, exists in “re ipsa” in a call-off stock contract such as the one in question.
The tax authorities have, therefore, confirmed that the Italian consignee, who will use the imported goods during the course of its business activity, is entitled to deduct the VAT paid at customs, and that the procedures and instructions already provided by the Italian tax authorities in Resolution no. 346/E dated 6 August 2008 remain valid.
Although the Italian tax authorities have not provided explicit clarifications on which, if any, VAT obligations should be fulfilled in Italy by the applicant company, in the opinion of this writer and following the indications provided in Resolution no. 346/E, the applicant company is not required to fulfil any obligation relevant for VAT in Italy in relation to the transactions subject of the ruling request.
[1] For the sake of clarity, reference in the ruling was made to a “consignment stock” agreement in its Italian VAT meaning. According to this contract, the consignor introduces goods into Italy with shipment from the United Kingdom to the warehouse of its Italian purchaser located in Italy. These goods are at the disposal of the Italian purchaser, but remain in the property of the consignor. The transfer of ownership takes place at the moment in which the goods are picked up by the Italian purchaser within the time limits established in the contract, which are always shorter than the ones set forth by Article 6, paragraph 2, Presidential Decree no. 633/1972. In the Anglo-Saxon tradition and as also indicated by the so-called “quick fixes”, a contract with these characteristics should be qualified as a “call-off stock” contract for VAT purposes.
[2] The judgments of the Court of Justice of the European Union mentioned by the Italian tax authorities are, in particular, those rendered in cases C-187/14 (DVS Road), C-132/16 (Iberdrola) and C-621/19 (Weindel Logistik Service).
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