Italy Publishes VAT Group Implementing Regulations

by McDermott Will & Emery
Contact

McDermott Will & Emery

In Depth

On April 18, 2018, the Italian Ministry of Economics and Finance published the Decree providing implementing regulations for the Value Added Tax (VAT) Group legislation in the Official Gazette.

The Decree is the last piece of regulation necessary to start applying the VAT Group legislation introduced by Law no. 232 of December 11, 2016 (2017 Budget Law). By introducing this VAT Group regime, Italy has exercised the option granted to EU Member States by Article 11 of the EU VAT Directive no. 2006/112/CE.

VAT taxable entities that meet the requirements for a VAT Group can now opt in, and the VAT Group will be effective starting from January 1, 2019. As a transitory rule for this first year, election for a VAT Group may be filed until November 15, 2018 in order to have the Group effective starting in 2019. After the first year, the election must be filed by September 30, and belated elections shall only be effective from the second following year.

Access to the VAT Group regime is available for VAT taxable entities established in Italy that have “financial,” “economic” and “organisational” links among themselves. A financial link is deemed to exist in case of a direct or indirect control relationship. An economic link is deemed to exist when the business activities carried out are of the same kind, are ancillary to one another or are substantially for the benefit of one of the participants. An organisational link is deemed to exist when the companies are subject to common coordination under the Italian Civil Code. When the financial link exists, the economic and organisational links are also presumed to exist. Therefore, in ordinary group situations, the requisite of the financial, economic and organisational links should normally be satisfied.

Cherry-picking is not allowed. If some entities in a group elect to be treated as a VAT Group, all VAT taxable entities in the group that satisfy the requisite financial, economic and organisational links must opt in.

By opting in for the VAT Group, the VAT taxable entities are treated as a single entity for VAT purposes. Supplies of goods and services among companies belonging to the same VAT Group are not relevant for VAT purposes. The VAT Group exercises all its rights and fulfils all its obligations as if it were a single VAT entity. The parent company is generally in charge of representing the VAT Group with respect to the fulfilment of the obligations deriving from VAT law (filings, payments, etc.)

The VAT Group has one VAT identification number for all its members, which must be indicated in all invoices issued and received. The Decree clarifies that invoices issued and received must also indicate the specific tax code (codice fiscale) of the company that supplied or received the good or service. This means that two similar codes, each comprising an 11-digit number, shall be indicated in each invoice: the VAT identification number, which identifies the VAT Group, and the tax code, which identifies the specific company engaged in the relevant supply of goods or services.

The Decree also provides detailed regulations concerning the filing of the option and subsequent modifications, instructions for the fulfilment of the VAT Group’s obligations in terms of keeping VAT books and records, payments, the filing of yearly VAT return and periodic communications, and reimbursements, among other things.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© McDermott Will & Emery | Attorney Advertising

Written by:

McDermott Will & Emery
Contact
more
less

McDermott Will & Emery on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.