Prepared by Davide Accorsi and Stefano Luigi Airaghi
With the reply to ruling no. 536, dated 06 August 2021, the Italian tax authorities provided clarifications on the correct treatment applicable for VAT and registration tax purposes to the transfer of trademarks registered in Italy included in a wider transfer of going concern carried out abroad.
In particular, in the reply to ruling in comment, the applicant is a company established in Switzerland which, with an act formed in Switzerland, sold its principal business, including also trademarks registered in the Italian Trademarks and Patent Public Register (hereinafter “ITPPR”), to a newly formed Swiss private company (hereinafter also “newco”). At the time in which the reply to ruling was submitted, the change in the ownership of the trademarks from the applicant to newco was not transcribed in the ITPPR. No other assets existing in Italy were included in the transfer of going concern. Moreover, neither the Applicant, nor newco have a permanent establishment in Italy.
In such circumstances, the applicant company asked the Italian tax authorities to confirm that the transfer of trademarks included in the transfer of going concern carried out abroad should be considered for VAT purposes as an autonomous supply of services according to article 3, paragraph 2, number 2, Presidential Decree no. 633/1972 and not as an integral part of a transfer of going concern, outside the scope of VAT according to article 2, paragraph 3, letter b), Presidential Decree no. 633/1972, and that, at the time in which the transfer of ownership between the applicant company and newco is transcribed in the ITPPR, registration tax in fixed amount finds application.
With reference to the first question, after having relived the main national and community legislation and case laws, as well as the main guidance related to (i) the VAT treatment applicable to transfers of going concerns, (ii) the definition of business for VAT purposes and (iii) the assets that should be included in the transfer of a business, the Italian tax authorities clarified that, in the case under discussion, it is not possible to identify the existence of a business according to article 19, Directive no. 2006/112/EC.
In particular, the Italian tax authorities, pointed out that the Community law implies that the business object of a transfer should be existent in the territory of a member State and that such a State opted for the application of the VAT exemption in comment. Such an interpretation is consequential to the optional nature of the regime established by article 19 of the Directive and gives the latter a logical sense. Even in case a State exercised such an option, the VAT treatment depends on the fact that also the objective, subjective and territorial requirements requested by Directive no. 2006/112/EC are met. To properly determine the place of supply, it is necessary that each member State (which opted for the introduction of such an exemption) considers only the transfers of business or their parts existing in such a State.
For such a reason, missing a business existing in Italy, the transfer of trademarks between the applicant and newco, acting as the purchaser of a business existing in Switzerland, cannot be considered outside the scope of VAT according to article 2, paragraph 3, letter b), Presidential Decree no. 633/1972. On the contrary, the transfer of trademarks should be qualified for VAT purposes as an autonomous provision of services, according to article 3, paragraph 2, no. 2, Presidential Decree no. 633/1972, which, considering that both the supplier and the customer are taxable persons established abroad, is not relevant for VAT in Italy from a territorial point of view according to article 7-ter, paragraph 1, letter a), Presidential Decree no. 633/1972.
As regards the second question, the Italian tax authorities clarified that, considering that the transfer of going concern, including registered trademarks, occurred with an act formed abroad and that no business is existing in Italy, neither the provision set forth by article 2, letter d), Presidential Decree no. 131/1986 (hereinafter, “Registration tax code”) nor the proportional 3% rate set forth by the Tariff, First Part, article 2, attached to the Registration tax code find application.
By the way, where the case of use occurs, according to article 6 of the Registration tax code, the act of sale should be registered applying the registration tax in a fixed amount of 200 euro as established by the Tariff, Second Part, article 11, attached to the Registration tax code.
 Which literally states that “In the event of a transfer, whether for consideration or not or as a contribution to a company, of a totality of assets or part thereof, Member States may consider that no supply of goods has taken place and that the person to whom the goods are transferred is to be treated as the successor to the transferor.
Member States may, in cases where the recipient is not wholly liable to tax, take the measures necessary to prevent distortion of competition. They may also adopt any measures needed to prevent tax evasion or avoidance through the use of this Article”.
 Such an option has been exercised by Italy, which established that the transfers and contributions to companies or other entities, including consortia, associations and other organizations, involving businesses or business branches do not constitute transfers of goods (cfr. art. 2, paragraph 3, letter b), Presidential Decree no. 633/1972).
Stefano Luigi AiraghiPwC TLS Avvocati e Commercialisti