Prepared by Alessia Zanatto, Francesco Pizzo, Andrea Casalini, Federico Peterlini, Giulia Fantinato
On December 30, 2023, Law no. 213/2023 was approved concerning the “Budget of the State for the financial year 2024 and multiannual budget for the period 2024-2026” (“Budget Law“). In this document we briefly analyze the most significant changes introduced with regard to VAT, excise duties and certain consumption taxes (so called “Plastic tax” and “Sugar tax”).
Paragraph 44 (Deferral of “Plastic tax” and “Sugar tax” to July 1, 2024)
By amending paragraphs 652 and 676 of art. 1 , Law no. 160 of December 27, 2019, the entry into force of the tax on the consumption on single use manufactured goods (“Plastic tax“) and on sweetened soft drinks (“Sugar tax“), previously planned for January 1, 2024, is postponed to July 1, 2024.
Clause 45 (Increase in the rate from 5% to 10% for child products and female hygiene protection and to 22% for child seats to be installed in motor vehicles)
Paragraph 45 abrogated numbers 1-quinquies) and 1-sexies) of Table A, Part II-bis, attached to Presidential Decree no. 633/1972. Moreover, at the same time it has amended the number 65) and introduced numbers 114-bis) and 114-ter) of Table A, Part III. Thus, the VAT rate was raised from 5% to 10% for the following goods:
- absorbent products, tampons for female hygiene protection and menstrual cups;
- powdered or liquid milk for the feeding of infants or children in early childhood, packaged for retail sale;
- food preparations made of flours, semolina, starch, fecula or malt extracts for the feeding of infants or children, packaged for retail sale (NC1901 10 00 code);
However, specifically regarding child seats to be installed in cars, considering the abrogation from Part II-bis was not accompanied by any modification of Part III of Table A, it should be considered that the ordinary VAT rate of 22% has been reintroduced.
Paragraph 46 (10% VAT rate for pellets)
For the months of January and February 2024, paragraph 46 extended the application of the discipline introduced by paragraph 73, art. 1, Law no. 197 of December 29, 2022, which provided for the application of the 10% VAT on pellets.
Paragraph 48 (Excise duties on tobacco)
Paragraph 48 amended the Legislative Decree no. 504 of October 26, 1995 (Consolidated Act on excise duties) with reference to the level of excise duties on cigarettes and smokeless inhalation tobacco and on the amount of consumption tax applicable to substitute products for smoking products, by amending, articles 39-octies, 39-terdecies e 62-quater of the above mentioned Consolidated Act.
Paragraph 77 (VAT on the transfer of goods to persons domiciled and resident outside the territories of the European Union)
Paragraph 77 of the Budget Law modifies art. 38-quater, paragraph 1, Presidential Decree no. 633/1972, which set the minimum value of the supply of goods, intended for personal and family use, transportable by means of private luggage outside the European Union and intended for supply to persons domiciled or resident outside the European Union, at Euro 70.00 (seventy), for which the tax relief operates.
Paragraph 80 (VAT Aspects – Adjustment of initial stock for businesses not adopting international accounting principles – IAS/IFRS)
The Budget Law provided for the adjustment of the opening inventories of assets for subjects who carry out business activity and do not adopt international accounting standards for the preparation of their financial statements. In particular, subjects involved may adjust the opening inventories of assets by deleting opening inventories of quantities or values that exceed the effective ones as well as by recording opening inventories that were previously omitted. From a VAT point of view, paragraph 80 imposed the payment of VAT in case of the elimination of the opening inventories of assets. In this regard, in order to determine the VAT due, it will be necessary to apply the average rate related to the year 2023 to the amount given by the multiplication between the mark-up coefficient, established by an executive decree, and the value eliminated.
The average rate should be calculated, considering transactions not subject to VAT or subject to special regimes, by comparing:
- the VAT related to the transactions, net of that relating to the supply of depreciable goods; and
- the declared turnover.
Paragraph 94 (Impossibility to avail oneself of the set-off of credits)
Paragraph 94, letter b), excluded the possibility to avail the offset provided according to article 17, Legislative Decree No. 241/1997, for those taxpayers who have tax assessments on their registration and related accessories or who have executive assessments assigned to the Italian collection agents for amounts exceeding Euro 100,000 and for which the payment terms have expired and payments are still due or suspension measures are not in place. This exclusion ceases to apply following the complete removal of the contested breaches. Finally, the same letter provides for preventive checks on offsets with ‘risk profiles’.
Clause 99 (Termination of the VAT number)
Paragraph 99 of the Budget Law amended article 35, Presidential Decree no. 633/1972, introducing the new paragraph 15-bis.3. In particular, the new paragraph provides, in the event that the tax authorities ascertain the existence of the conditions for the termination of the VAT registration number, in respect of those taxpayers who in the preceding 12 months had already communicated the termination of their activity, that they may apply for a new VAT registration number only as self-employed persons or legal representatives of companies or entities, subject to the issuance of a surety policy or bank guarantee for the duration of three years from the date of issue and for an amount not less than Euro 50,000. Moreover, an administrative penalty of €3,000 imposed at the same time as the termination of the VAT registration under article 11, paragraph 7-quater, Legislative Decree no. 471/1997.
Let’s Talk
For a deeper discussion, please contact: