Value Added Tax (IVA) And Reimbursement
A non resident entity who intends to carry out VAT taxable business in Italy and subsequently, being able, in case, to obtain a VAT reimbursement, has the following options:
- acting directly by VAT direct registration with the Italian Revenue Service (if the entity is resident in EU)
- appointing a tax/fiscal representative in Italy.
These options are the result of the law provisions of the EC Directive No. 2000/65/EC and brought into force in the Italian legal system by the Legislative Decree No. 191/2002 which has removed the duty of appointing a tax representative formerly charged to all non resident tax payers carrying on VAT taxable activities in Italy.
Direct Registration:
Generally speaking, the direct registration allows tax payers, both individuals or legal entities, non-resident in Italy and with no permanent establishment in the Italian territory, to directly fulfill VAT duties and to exercise the rights deriving from the application of the rules laid down on VAT.
In case a non-resident entity is a creditor of the Italian Treasury because of VAT payments to Italian suppliers, reimbursement of said taxes may be obtained, provided that the entity does not have a permanent establishment in Italy and provided that the entity is registered at its local tax office if resident in the EU, by submitting proper application to the special Revenue Service office.
Starting from 1st January 2006, the Agenzia delle Entrate - Centro Operativo di Pescara has the exclusive competence on the direct registration in Italy of non-resident parties who intend to identify themselves directly and proceed directly to discharge their VAT obligations (previously the competent office in this matter was in Roma ).
Agenzia delle Entrate
Centro Operativo di Pescara
Area Controlli - Servizio identificazione non residenti
Via Rio Sparto 21
65129 Pescara, Italy
Tel. +39 085 577 2359 +39 085 577 2318/2380
Fax +39 085 577 2325
centrooperativo.pescara.ivanonresidenti@agenziaentrate.it
www.agenziaentrate.it
Fiscal Representative
The VAT reimbursement for a non EU- resident entity is granted only if a reciprocity agreement exists (through direct VAT registration), unless a
fiscal representative is appointed before receipt of the first Italian invoice.
The representative must reside in Italy and be jointly responsible, together with the party represented, for the obligations arising under VAT rules.
The representative must be certified: by a public act (power of attorney), by a registered contract, or by letter entered in the appropriate registry at the VAT office that has jurisdiction over the fiscal residency of the representative or the party represented; furthermore, the other contracting party must be notified before executing the operation.
The representatives may not limit themselves to asking for the reimbursement of the VAT credit, but must distribute all assets pertaining to any VAT results executed by the non-resident company in Italy. Therefore, in the event the non-resident company undertakes, according to VAT rules, any transactions in Italy, the representative must execute the resulting invoices. Furthermore, it must, in any case, maintain VAT accounting books, execute monthly payments, present the annual statement etc.; in other words, fulfill all the duties recumbent upon an VAT resident entity.
This is somewhat onerous as a result of the procedure examined, in that the entity thus named must be compensated for an activity, that, at least in part, is very formulated, and this also in regard to its joint patrimonial responsibilities pertaining to VAT obligations.
In order to fully inform, we specify that, as essentially defined by the R.M. no. 129/E/1998/ 130275 of September 7th 1998, the company’s fiscal officer may not be nominated ex post.
(It must take place according to article 17, second paragraph, of the stated D.P.R. no 633 of 1972, respecting the prescriptions set forth in the following article 53, third paragraph, and must be communicated to the other contracting party before the execution of the transaction). Thus, for transactions already completed, where the stated obligations have not been fulfilled, it is not possible to obtain the reimbursement of taxes paid to the domestic supplier.
That’s why it is essential to appoint a fiscal representative before receipt of the first Italian invoice.
The claim for VAT refunds is only possible in the case of acquisition or import of goods and services pursuant to article 19, paragraph 2 of DPR n. 633 from October 26th 1972, stating that VAT is deductible.
The Italian value added-tax law limits the deduction of VAT on certain products and services.
It cannot be claimed for:
- Purchase of real property (circular no. 64 dated 03/08/82)
- Hotel accommodation and restaurants
- Food and beverages
- Travel and entertainment expenses
- Purchase of components and spare parts of motor cars, motor vehicles and motorcycles
- Petrol and diesel or other fuels for the above vehicles unless they have a public use and are solely used for business activities
- Luxury goods such as furs, sparkling wines and oriental carpets
It goes without saying that the acquisition of goods and services should be closely connected with the company’s activity.
Reimbursements can be claimed only for invoices of the same calendar year. Applications must be presented to the proper Italian VAT reimbursement office (see below) by
June 30th of the following year at the latest.
Further to the changes introduced by the Internal Revenue Office Decree issued on 30 December 2005 (and published on Gazzetta Officale n.48 of the 27 February 2006) and by the Legislative Decree No. 191/2002, which brought into force the EC Directive No. 2000/65/EC,
starting from the 1st January 2006, the exclusive office empowered to process the VAT refund application forms by non resident tax payers in Italy is the Italian Revenue Service Operational Centre located in Pescara (so called Centro Operativo di Pescara):
Agenzia delle Entrate
Centro Operativo di Pescara
Ufficio Rimborsi IVA ai non residenti
(Italian Revenue Service Operational Centre – VAT Reimbursment Office)
Via Rio Sparto n. 21
65100 Pescara, Italy
Tel. +39 085 577 2359 +39 085 577 2318/2380
Fax +39 085 577 2325
centrooperativo.pescara.ivanonresidenti@agenziaentrate.it
www.agenziaentrate.it
The application can be submitted by mail, via express courier or by direct handing, in this last case the Tax Authority must issue an acknowledgment of receipt where the application is directly submitted.
The applicant must enclose the following documentation to the application:
- a master copy of a certification issued by the local Tax Authorities, where it is indicated that the applicant is a VAT tax payer in their home Country (this certification is valid for only 1 year from the date of issue);
- master copies of invoices related to the purchases made in the time concerned, filled with all the needed information (e.g. number and date of issue, name and address of the supplier, VAT registration number, name and address of the applicant, a clear description of the nature of the goods and services supplied, the date of supply, the cost of goods and services, the rate and the amount of VAT charged, etc.), according to the Art. 21 D.P.R. No. 633/72;
- a master copy of a power of attorney in case where the refund is claimed by a representative.
The claim can pertain to one or more quarters up to a year. Where the VAT refund is claimed with regard to a quarter, it is admissible only for amounts exceeding Euro 200 (if the refund is lower the refund can be claimed only together with the following quarter and provided that the refund regarding both quarters exceeds Euro 200).
Where the VAT refund is claimed with regard to a whole year, it is admissible only for amounts exceeding Euro 25.
The Italian tax authority, precisely the Centro Operativo di Pescara, must refund the VAT within six months from the date of the claim, otherwise interests are due since the 180th day following the date of the claim.
Applicant can ask the refund is paid by one of the following options:
- credit transfer on a foreign bank account opened in the applicant's name in Italy to one of the empowered or on a foreign postal account as well;
- credit transfer on a foreign bank or postal account opened in the applicant's name in the State where the applicant resides. In this case the applicant must enclose the full bank data including the BIC (Bank Identifier Code) and the IBAN (International Bank Address Number) codes and the transfer costs are charged to the applicant
The application form must be completed in Italian (Circ. 03/08/1982), however a request completed in another EU language is mostly accepted.
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