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September 24, 2021
2021-1730

Italy's new VAT rules on e-invoicing of cross-border transactions and pre-populated VAT ledgers and returns discussed

As of 1 January 2022, new Italian value-added tax (VAT) rules will apply regarding:

  • Electronic invoicing (e-invoicing) for cross-border transactions
  • Pre-populated VAT ledgers and VAT returns

The scope of e-invoicing is to be extended for cross-border transactions. In addition, the Italian Revenue Agency (IRA) has started using the relevant data to draft VAT ledgers and VAT returns, which will be made available to taxpayers for their validation or integration.

E-invoicing of cross-border transactions          

In accordance with art. 1 (Section 1103) of the 2021 Budget Law (Law no. 178 dated 30 December 2020), cross-border transactions will be subject to e-invoicing effective from 1 January 2022.

Taxable persons established in Italy will have to e-file through the e-invoicing Interchange System (SDI) the data pertaining to:

  • Accounts Receivable (AR) transactions performed with non-established customers within the deadline for the issuance of the invoice (i.e., 12th day following the taxable event)
  • Accounts Payable (AP) transactions performed with non-established suppliers by the 15th day of the month following the month when the invoice was received, or the taxable event occurred

Based on the current technical requirements, it is expected that established operators will need to generate an XML document to be sent to the tax authorities via the SDI for both AR and AP cross-border transactions.

Specifically, the reverse-charge on AP cross-border invoices will be accomplished through an electronic self-invoice to be sent to the SDI; the “document type” code to be included in the XML needs to be properly identified depending on the underlying transaction (e.g., TD17 for cross-border supplies of services, TD18 for intra-European Union acquisition of goods).

Consequently, the Esterometro return will no longer apply for transactions carried out as from 1 January 2022.

Pre-populated VAT ledgers and VAT returns

The IRA (via Provvedimento no. 183994 dated 8 July 2021, issued based on art. 4 of Legislative Decree no. 127/2015) announced that, on a trial basis, starting with transactions carried out from 1 July 2021, they will make available the following draft documents to Italian-established taxpayers:

  • VAT ledgers, regularly updated with collected information, from the first day until the last day of the month following the reference quarter
  • Quarterly VAT communications (Li.Pe.), available from the sixth day of the second month following the reference quarter

Starting from 2022, the IRA will make available also the draft annual VAT return (from the 10th of February of the year following the one of reference).

Until the end of Fiscal Year (FY) 2022, these draft documents will be prepared by the tax authorities only for taxpayers who perform (by option) the VAT calculation on a quarterly basis. Moreover, some taxable persons are excluded from this simplification (e.g., those using special VAT regimes, VAT groups, Public Administration, some retailers, and health service providers).

Taxpayers may validate or add information to the draft VAT ledgers (the consultation is available from 13 September 2021 for the third quarter of FY 2022). In this case, in principle, the taxpayer is exempted from maintaining the VAT ledgers since these are considered maintained by the tax authorities on his behalf (unless some derogations apply).

Taxpayers may access the draft documents via the IRA’s web-portal, using their own credentials or by engaging an intermediary (e.g., a tax professional) who has been duly appointed to act for them.

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For additional information with respect to this Alert, please contact the following:

Studio Legale Tributario, Rome

Studio Legale Tributario, Milan

Studio Legale Tributario, Treviso

Studio Legale Tributario, Turin

 

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