Italy to introduce a transition period after a ‘no deal’ Brexit with VAT implications.

According to the Law Decree 25 March 2019, n.22 published in the Italian official gazette and considering a ‘no deal’ Brexit scenario, the Italian government would introduce a 18 months transition period “to ensure safety, financial stability and market integrity” as well as the “protection of the freedom of residence of Italian citizens and those from the United Kingdom”.

The decree, mainly aimed to banks, insurances companies and financial institutions, establishes that current dispositions (where the UK is considered part of the EU) will remain effective from the date of a‘no deal’ Brexit until the end of the 18-month transition period.

In addition, in the Tax provision section, the decree states that EU directives or regulations with regard to VAT and excise duties will continue to apply during the 18-month transition period as long as they are compatible with the new regulations. The Ministry of Economy and Finance will issue one or more decrees in order to establish the implementation of mentioned provisions.

As always we will keep you updated regarding all VAT news from Italy, United Kingdom, Brexit and more.

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