The reverse charge system is used for intra-Community acquisitions of goods and for the delivery of goods and services in Italy when provided by non-resident taxable entities to resident taxable entities.
A “call off stock” arrangement arises when goods, owned by a foreign supplier, are sent to another country for storage, often at the premises of the customer. The customer takes items from this stock as needed. The legal ownership of these goods is transferred from the supplier to the customer only when they are withdrawn from the stock.
Learn all about reverse charge and “call off stock” in Italy in our comprehensive guide below.
In Italy a “call off stock” simplification exists for such stock arrangements. If goods are under the exclusive control of a single Italian customer, based on a sale or return basis (contratti estimator – where ownership isn’t transferred until the goods are taken by the customer), the overseas company isn’t obliged to register for Italian VAT. When the customer accesses the items, it’s considered an intra-community transaction. A specific stock agreement must be in place between the parties to facilitate this VAT treatment.
EU’s Call-off Stock Simplification: For the call-off stock arrangements to enjoy simplification under the VAT Directive, certain conditions must be adhered to:
According to Article 67 of the Italian VAT Law, “import” transactions refer to the introduction of goods into Italy from a non-EU country that have not yet been released for free circulation in the EU.
The Italian VAT law follows the EU VAT Directive’s Article 2(1)(d) which treats imports as taxable unless an exemption or exception is applicable, and such transactions are generally subject to taxation under Article 1 of the Italian VAT Law.
Certain types of imports into Italy qualify for an exemption from Italian VAT. For instance, when goods are re-imported in their original condition by the same individual who previously exported them, they can be exempted as long as they meet the criteria for customs duty exemption. Additionally, goods donated to public entities or to certified organizations focused solely on aid, charity, education, research, or science are also exempt. This exemption also extends to goods donated to communities impacted by natural disasters or officially declared catastrophes.
From 1 July 2021, VAT is charged on all commercial goods imported into the EU, regardless of value.
Last Updated: 08/09/2023
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