Prepared by Lorenzo Ontano, Annarita Terrone and Matteo Zovi
With the Response to the Ruling no. 77, published on January 18, 2023, the Italian Tax Authorities provided clarifications regarding the application of the IOSS regime (“import one stop shop”) to the supplies of goods carried out through the “dropshipping” commercial scheme, with reference to the identification of the deemed supplier in said transactions and to the determination of the intrinsic value when the importation takes place.
In the case at hands, the taxpayer acts as an intermediary in the transaction, through its e-commerce platform, by promoting the products on its website, taking the final purchasers orders and, finally, forwarding them to its supplier established in a non-EU country (i.e. China).
Moreover, the operation falls in the “dropshipping” scheme, which involves an intermediary (the taxpayer), the dropshipper (the Chinese supplier) and, finally, the end customer who finalizes the purchase on the intermediary’s website.
Therefore, the taxpayer acts as “first supplier” or “intermediary”, while the Chinese supplier, acting as dropshipper, takes care of the shipment of the goods directly to the final customer.
In the light of the described scenario, the taxpayer, considering that he is acting as a “deemed supplier”, according to Article 14-bis of Directive No. 112/2006 (i.e. the “VAT Directive”), asks to the Italian Tax Authorities to confirm the correctness of his interpretation and that it is possible to apply for the IOSS regime, in order to proceed with the payment of the VAT due, if any, in relation to the supplies of goods performed within the European Union territory.
The Italian Tax Authorities confirm that, in this case, the taxpayer can be qualified as “deemed supplier”, as provided to Article 14-bis of the VAT Directive, according to which “where a taxable person facilitates, through the use of an electronic interface such as a marketplace, platform, portal or similar means, distance sales of goods imported from third territories or third countries in consignments of an intrinsic value not exceeding EUR 150, that taxable person shall be deemed to have received and supplied those goods himself. Where a taxable person facilitates, through the use of an electronic interface such as a marketplace, platform, portal or similar means, the supply of goods within the Community by a taxable person not established within the Community to a non-taxable person, the taxable person who facilitates the supply shall be deemed to have received and supplied those goods himself”.
Moreover, the Italian Tax Authorities clarified, referring also to the Explanatory Notes of the European Commission, that “the intrinsic value at importation is the net price paid by the customer at the time of supply (i.e. at the time when the payment by the customer was accepted)” as well as that the operator using the IOSS regime should indicate “on the VAT invoice (if issued) or on the commercial invoice accompanying the goods for customs clearance (…) the price paid by the customer”.
Hence, it is confirmed that it is possible to apply the IOSS regime also for the supplies of goods performed using the dropshipping scheme under the conditions above described and that the intrinsic value to be considered is the net price paid by the customer.
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