VAT reimbursement for non-EU residents: when it is possible
When a VAT reimbursement is possible under Article 38b of the VAT Decree to a company resident in a non-EU country
In its Reply to tax clearance application no. 248 of 9 May , the Revenue Agency clarifies that a VAT reimbursement to a company resident outside the EU is precluded if the invoice is in the name of the Italian tax representative.
Specifically, the applicant Israeli company intends to issue in Italy only active invoices whose taxable entity is the purchaser or the assignee.
It asks what to do in order to use the simplified procedure under Article 38b of the VAT decree since, following ADM ministerial memorandum no. 40/2021 some customs offices did not allow it to make direct imports into Italy in the absence of an Italian VAT number, therefore it was forced, due to lack of a permanent establishment, to appoint a tax representative to be the invoice holder.
The Agency notes that Article 38-ter of the VAT decree states that “ 1. The provision of the first paragraph of Article 38-bis shall also apply, subject to reciprocity, to persons carrying on a business, trade or profession, established in States outside the Community, limited to the tax relating to the purchase and importing of movable goods and services inherent in their activity. 1-bis. The reimbursements referred to in Paragraph 1 shall be granted to persons domiciled or resident outside the European Union who have joined the special regimes referred to in Articles 74-quinquies et seq. even in the absence of the condition of reciprocity and even if they have carried out transactions within the territory of the State under those special regimes. […]”.
According to the combined provisions of Articles 38-bis and 38-ter of the VAT decree, therefore, taxable persons resident in countries outside the European Community, without a permanent establishment in Italy, may request a reimbursement of the VAT paid in the territory of the State provided the following conditions are met:
1) absence of active transactions with territorial relevance in Italy during the reimbursement period, with the exception of transactions for which the entity liable to pay tax is the Italian transferee/buyer (i.e. transactions subject to reverse-charge), transport services and related ancillary transactions that are not taxable pursuant to Article 9 of the VAT Decree and transactions carried out pursuant to Article 74- septies of the VAT Decree;
2) relevance to the activity of the non-EU taxable person of the purchases or imports of goods and/or services in respect of which the VAT reimbursement is sought;
3) deductibility in Italy of VAT claimed for reimbursement, pursuant to Articles 19, 19- bis 1 and 19-bis 2 of the VAT Decree (conditions for deductibility);
4) reciprocity of treatment (rectius, recognition of the right to a tax reimbursement) of Italian traders in the taxable person’s foreign state. Currently, reciprocity conditions exist only with Norway, Israel and Switzerland.
According to the Revenue Agency, the presence of the tax representative in Italy does not prevent the use of the simplified reimbursement procedure, however it is required for purchase invoices
- “to be registered in the VAT number of the non-resident”
- and “that they do not enter into the periodic settlements and annual declaration submitted by the tax representative”.
In the present case, the only person entitled to recover the tax is the tax representative who, after recording the customs invoices in the purchase register, may deduct the VAT paid or request an annual or quarterly reimbursement in accordance with Article 38-bis of the VAT decree.
