Prepared by Davide Accorsi e Stefano Luigi Airaghi
With the answer to ruling no. 248 dated 9 May 2022, the Italian tax authorities provided clarifications with reference to VAT refunds in simplified procedure ex Article 38-ter, Presidential Decree 633/1972, applicable for non-resident persons established in non-EU Countries.
Specifically, the ruling request in question was submitted by a taxable person established in Israel who exclusively carries out for Italian VAT purposes, on the input side, domestic purchases taxable in Italy for which the person liable to pay VAT is the supplier and taxable imports of goods while, on the output side, domestic transactions for which the person liable to pay VAT is the resident client.
The applicant company points out that, following the publication of the Excise, Customs and Monopolies Authorities’ Circular Letter no. 40/2021 dated 14 December 2021, some customs offices did not allow it to carry out imports into Italy without an Italian VAT number and, consequently, it was forced to appoint a fiscal representative and obtain an EORI code. This, although, according to the applicant, obtaining a VAT number would not be necessary in relation to the type of transactions carried out and the VAT legislation in force.
That being said, the reply provided by the Italian tax authorities, first of all clarified that the reciprocity conditions allowing the application of the refund procedure provided for by Article 38-ter, Presidential Decree 633/1972, currently exists only with Norway, Israel and Switzerland. In this regard, it should be underlined the fact that, inter alia, the United Kingdom, since it is not included in the list of countries explicitly mentioned, would therefore be implicitly excluded, so that the possibility to apply this institute for persons established in that country is precluded.
The document then clarified that the same principles set forth in the reply to ruling no. 359 dated 20 May 2021 with respect to VAT refunds ex Article 38-bis2, Presidential Decree 633/1972, applicable for non-resident persons established in EU Countries, can be applied to refunds pursuant to Article 38-ter, Presidential Decree 633/1972.
In particular, the Italian tax authorities confirmed that, the fact of possessing an Italian VAT number obtained through the appointment of a fiscal representative, does not per se preclude the possibility of applying the simplified refund procedure pursuant to Article 38-ter, Presidential Decree 633/1972.
However, it was also clarified that, if the VAT credit to be claimed for refund is documented by invoices and/or customs bills addressed to the VAT identification number of the non-EU person, such credit cannot be claimed for refund through the simplified procedure ex Article 38-ter, Presidential Decree 633/1972, but only through the ordinary annual and/or quarterly refund procedure provided for by Article 38-bis, Presidential Decree 633/1972, after registering the documents in the purchases VAT ledger pursuant to Article 25, Presidential Decree 633/1972.
In this regard, the Italian tax authorities clarified that the appointment of a fiscal representative as indicated by the Excise, Customs and Monopolies Authorities in Circular no. 40/2021 ”is not in itself an obstacle to access the refund procedure pursuant to Article 38-ter of the VAT Decree. What does, in fact, inhibit its use is the circumstance that the customs bills – which are to all intents and purposes equivalent to purchase invoices – are headed to the company’s Italian VAT number”.
However, although for domestic purchases the non-resident person may ask the supplier not to include its Italian VAT identification number on the invoice and thus obtain a document that would generate a VAT credit recoverable through the simplified refund procedure provided for by Article 38-ter, Presidential Decree 633/1972, for imports the non-resident person may not be able to receive a customs bill that does not include the data of its Italian VAT identification number, since customs offices may require the non-resident person to indicate an Italian VAT identification number in order to carry out the import.
Moreover, with regard to the possibility for the non-resident person to de-register for VAT purposes and carry out direct imports in the future even in the absence of an Italian VAT number, the Italian tax authorities did not provide an answer and merely identified the question as falling within the competence of the Excise, Customs and Monopolies Authorities.
In the writer’s opinion, the need to identify oneself for VAT purposes should not be an issue regulated by the Excise, Customs and Monopolies Authorities. This conclusion also seems to be in line with what is indicated in the aforementioned Circular no. 40/2021 of the Excise, Customs and Monopolies Authorities, which clarified that ”the figure of the fiscal representative for VAT purposes is of purely fiscal value. The sole purpose of a VAT representative is to allow the appointed representative to comply, solely for the purposes of value added tax, with the tax obligations connected to the activity of a person not established in Italy and does not give the holder of the corresponding VAT number any legitimacy to operate, in place of the non-established person, in legal contexts other than VAT itself”.
Therefore, it is hoped that a joint clarification from the Italian tax authorities and the Excise, Customs and Monopolies Authorities will be provided on the need to identify for VAT purposes a non-resident person who exclusively carries out imports and other transactions for which, under the Italian VAT legislation, an Italian VAT number would not be required.
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PwC TLS Avvocati e Commercialisti
PwC TLS Avvocati e Commercialisti