NEWSLETTER N. 5 - 2019

  • REPORTING OF CROSSBORDER TRANSAC-TIONS

    Dear clients,

    a new reporting duty, effective as of 2019, was introduced under the Italian Budget Law 2018: the reporting of cross-border transactions. The first deadline under this new reporting duty is set forth on 28 February 2019. Hence, please be advised as follows:

  • 1. INTRODUCTION

     As you may know, a general electronic invoicing duty is effective as of 2019 for all B2B and B2C transactions. Transactions with non-resident and/or non-established taxpayers continue to be documented through paper invoices in any case.

    Hence, the duty to report cross-border transactions (so-called "esterometro"), as introduced by section 1(3-bis) of the Italian legislative decree 127/2015 - origins from the need to inform the Italian Tax Authority of the above mentioned transactions with foreign counter-parties that do not transit across the Sistema di Interscambio (used for e-invoicing).

  • 2. PERSONAL SCOPE

    Cross-border transactions reporting is compulsory for all taxable persons resident or established in Italy for VAT purposes.

    Taxpayers not required to issue e-invoices under section 1(3) of the Italian legislative decree 127/2015 are exempted from such duty, i.e.:

    • taxpayers benefiting from the young entrepreneurs flat tax scheme under section 27(1) and 27(2) of the Italian law-decree 98/2011 (now repealed, but still valid for those who started using it prior to 31 December 2015);
    • taxpayers benefiting from the flat tax scheme for professionals under section 1(54)-(89) of the Italian law 190/2014;
    • amateur sports clubs with an income from trade activities of up to EUR 65,000, as long as they make sure that the invoice is issued on their behalf by the purchaser or the client as taxable person for VAT purposes.
  • 3. MATERIAL SCOPE

    Data relating to the sale of goods or the performance of services:

    • vis-à-vis taxpayers not established in Italy
    • received from taxpayers not established in Italy

    must be reported.

    Transactions that are:

    • subject to customs clearance (imports);
    • subject to electronic invoicing via the Sistema di Interscambio (SdI) are excluded from the duty to report cross-border transactions.

    More specifically, invoices issued are reported by submitting the invoice as an XML file to the Sistema di Interscambio (SdI) and by filling out the "Beneficiary Code" field using the "XXXXXXX" code.

    Note: In consulenza giuridica n. 8/2019, the Italian Tax Authority clarified that all other fiscal reporting duties shall be deemed satisfied, if data on issued invoices is submitted to the OTELLO 2.0 system. Hence, in such cases, there is no duty to report cross-border transactions.

  • 4. HOW TO SUBMIT DATA

    Reporting must be made in compliance with the technical specifications no. 89757/2018.

    More specifically, invoice data must be submitted as an XML file.

    In order for XML files to be accepted by the Italian Tax Authority file reception system (receiving system), the taxpayer responsible for data reporting (obliged taxpayer or a person authorized by such taxpayer) must electronically sign (qualified electronic signature or signature based on certificates issued by the Italian Tax Authority) or place thereupon an electronic seal issued by the Italian Tax Authority (only if files are uploaded on the web interface of the "Fatture e Corrispettivi" service).

    Files may be submitted to the Italian Tax Authority file reception system as follows:

    • through a web-based application system by using the web service form over HTTPS (encrypted TLS channel, exclusive 1.2 version);
    • through data transfer between remote computers over SFTP;
    • through electronic data transfer via web interface by using the "Fatture e Corrispettivi" service that may be accessed from the Italian Tax Authority website by using the Entratel or Fisconline credentials, the digital identity (SPID) or a chip card registered for electronic services ("carta nazionale dei servizi" - CNS).
  • 5. DATA TO BE REPORTED

    The following data must be reported:

    • personal data of the seller or the service provider;
    • personal data of the purchaser or the client;
    • data relating to the transaction document;
    • registration data (for received documents and relating VAT credit/debit notes only);
    • transaction document number;
    • VAT base;
    • applied VAT rate;
    • VAT;
    • transaction type (if VAT is not shown on the document).

    The same data are required under the so-called new spesometro (VATable transactions report).

    Note: For the codes to be used to report the "transaction type" - if VAT is not shown - please refer to the clarifications released by the Italian Tax Authority in newsletter no. 1/2017, decision no. 87/2017 and the FAQs published on the "Fatture e Corrispettivi" section on the website. Hence, for example, goods sold to be exported or intra-Community sales are reported by using the N3 code, services supplied to VATable persons in the EU by using the N6 codes and services supplied to VATable persons outside the EU by using the N2 code.

  • 6. DATA SUBMISSION DEADLINES

    Data must be submitted no later than on the last day of the month following

    • the month in which the document was issued; or
    • the date of receipt of the transaction document, which is deemed the date of registration of the transaction for VAT settlement purposes.

    Hence, purchase invoices received and registered no later than on day 15 of the following month (e.g. February) and calculated for VAT settlement regarding the previous month (e.g. January), should be included in the previous month's (e.g. January) report.

  • 7. PENALTIES

    Under the new section 11 (2-quater) of the Italian legislative decree 471/1997, an administrative penalty of EUR 2 for each invoice (up to a maximum amount of EUR 1,000 for each quarter) applies if the submission of data on transactions is omitted or is incorrect.

    Such penalty is reduced to half (up to a maximum limit of EUR 500), if data are submitted within 15 days from such deadline or if correct data are submitted within such deadline.

    The principle of penalty aggregation, as set forth under section 12 of the Italian legislative decree 472/1997, does not apply.

     

    Yours sincerely,

    HAGER & PARTNERS.

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