Executive summary

Issuing implementation measure Prot. No. 178713/2025 on 14 April 2025, the Director of Italian Revenue has provided operational guidance for complying with a requirement to file a guarantee for certain nonresident entities that are registered for VAT in Italy through an Italian VAT representative.

Detailed discussion

New obligations were defined in Italy with Ministerial Decree of 4 December 2024, implementing Article 35, paragraph 7-quater of Presidential Decree No. 633/1972, which pertains to represented entities that, as a result of the appointment of a VAT representative in Italy, intend to conduct intra-EU transactions. (See EY Global Tax Alert, Italy introduces new obligations for tax representatives and represented entities, dated 20 December 2024.)

The regulation applies only to entities that are not resident in the European Union or in one of the other European Economic Area (EEA) States (Iceland, Liechtenstein and Norway).

According to the Italian law, each affected entity must present an appropriate guarantee to obtain inclusion — and permanence — within the database of taxable entities conducting intra-EU transactions (i.e., VIES — VAT Information Exchange System).

The guarantee provided by the nonresident entity must be for a period of at least 36 months, starting from the date of the guarantee's delivery to the Italian Revenue office, after which the taxpayer becomes free to operate without renewing the guarantee.

The guarantee is provided in favor of the Director pro tempore of the appropriate Italian Revenue office, based on the tax representative's tax domicile, and the value of the guarantee must be at least €50k.

On 14 April 2025, the Director of Italian Revenue issued implementation measure (Prot. No. 178713/2025) concerning the obligation to provide the guarantee. In particular, the new guidance includes a standard guarantee template to be used for fulfilling the new requirement and defines various suitable guarantees, including bank guarantees, insurance policies and government securities or state-guaranteed bonds deposited as collateral.

Guarantees for entities that were already included in the VIES database as of 15 April 2025 (the date on which the measure of the Director of the Italian Revenue was published) must be provided within 60 days (i.e., by 14 June 2025) to fulfill the obligations prescribed by the Decree.

If the guarantee is not submitted within this 60-day interim period, the tax authorities will inform the VAT representative that the procedure to remove the nonresident entity from the VIES database has begun. The entity then will have an additional 60 days to regularize its position by filing the guarantee. If the guarantee is not provided within the extended timeframe, the entity will be removed from the VIES database.

Implications

These new VAT obligations could significantly affect the ability to carry out intra-EU transactions for nonresident entities operating in Italy through a VAT representative. Affected taxpayers will need to comply in order to avoid potential disruption of their business.