NEWSLETTER N. 13 - 2021

  • E-COMMERCE NEWS 2021

    With the publication in the Italian Official Gazette no. 141 of Legislative Decree 83/2021 on 15 June 2021, the provisions contained in sections 2 and 3 of Directive 2017/2455/EU and Directive 2019/1995/EU relating to the supply of services and distance sales of goods carried out within the EU to private individuals have been incorporated in Italian law.

    The new provisions shall enter into force as of 1 July 2021 and concern:

    • the extension of the scope of the MOSS (turning into a One Stop Shop (OSS)) to all B2C supplies of services as well as to intra-Community distance sales of goods;
    • the creation of a similar scheme (Import One Stop Shop) for distance sales of goods imported from third territories or third countries;
    • the abolition of the current VAT threshold for intra-Community distance sales of goods and the introduction of a new EU-wide threshold of EUR 10,000 above which VAT applies in the State of destination;
    • the provision of new obligations for electronic interfaces facilitating intra-Community distance sales of goods by non-EU persons and distance sales of goods, imported from third countries or territories, of an intrinsic value not exceeding EUR 150.

    Please find below the latest news.

    A) AMENDMENTS INTRODUCED TO DPR 633/1972 (ITALIAN VAT DECREE)

    1. Supplies of goods facilitated by electronic interfaces (new section 2-bis of DPR 633/1972). According to the new provision:

    • intra-Community distance sales (see below) and the supply of goods with dispatch or transport starting and ending in the territory of the same Member State by taxable persons not established in the EU (extra-EU) to non-taxable persons; and
    • distance sales of goods imported from non-EU territories or third countries, in consignments of an intrinsic value not exceeding EU 150,

    shall be deemed to be carried out by the taxable person who facilitates them using an electronic interface, such as a virtual marketplace, platform, portal or similar means.

    For VAT purposes, electronic interfaces take on the role of the buyer and the reseller of goods, generating two transactions:

    1. B2B transaction: between the underlying supplier and the taxable person operating the electronic interface (deemed supplier);

    2. B2C transaction: between the taxable person operating the electronic interface and the final customer (private consumer).

    The B2B supply, if territorially relevant within the EU, is exempt from VAT (pursuant to section 10 (3) of DPR 633/1972), without prejudice to the right of the "underlying" supplier to deduct the input VAT paid for the purchase or import of the goods supplied (pursuant to section 19(3)(d-bis) of DPR 633/1972).

    The supplies (B2B and the following B2C) shall be deemed to be made upon acceptance of payment, taking into account that the delivery of the goods or the issuance of the invoice is irrelevant (pursuant to section 6(7) of DPR 633/1972).

    The respective records shall be kept for a period of ten years from the end of the year during which the transaction was carried out.

     

    2. Special scheme for the declaration and payment of VAT on importation (new section 70.1 of DPR 633/1972). According to the new provisions, with reference to transactions:

    • whose dispatch or transport ends in Italy;
    • in consignments of an intrinsic value not exceeding EUR 150;
    • for which the special scheme according to section 74-sexies.1 of DPR 633/1972 (so-called IOSS, see below) does not apply,

    the person who presents for the aforesaid goods to customs on behalf of the buyer may make monthly payments of the tax collected from the recipient of the supply of goods.

    Goods imported under this special scheme are subject to the ordinary VAT rate. NB:  The recipient of the supply of goods may opt for the importation procedure pursuant to section 67 of Legislative Decree 633/1972 for the application of the reduced VAT rate.

     

    3. Special schemes - so-called OSS EU/OSS NON EU/IOSS

    The adoption of the "new" special schemes OSS/IOSS shall simplify VAT obligations for businesses selling goods and services to final consumers throughout the EU by allowing them to:

    • register for VAT electronically in a single Member State for all eligible supplies of goods and services to customers located in all the other 26 Member States;
    • declare and pay VAT due on all supplies of goods and services in a single electronic return;
    • work with the tax administration of the Member State in which they are registered for OSS in their own language, even if their sales are cross-border.

    Generally, registration for OSS/IOSS takes effect:

    • the first day of the calendar quarter following
    • the one in which the taxable person notifies the Member State of registration of the intention to start using OSS/IOSS.

    In Italy, registrations are possible from 1 April 2021.

    NB: From 1 July 2021, the so-called MOSS will be integrated into the One-Stop-Shop (OSS): businesses registered with MOSS on 30 June 2020 will be automatically registered with the new OSS from 1 July 2021.

    In particular, with the implementation of the so-called VAT e-commerce package, the following optional schemes have been adopted:

    (i) "One Stop Shop or OSS - non EU" for all B2C services in the EU (new version of section 74-quinquies), according to which:

    taxable persons domiciled or established outside the EU (non EU), not established in any Member State, may register in Italy for the fulfilment of VAT obligations with respect to all services supplied in the EU to non-taxable customers (B2C) via the One Stop Shop (OSS-non EU).

    Taxable persons applying OSS non-EU for all transaction covered by such scheme:

    • are exempt from invoicing, registration and annual VAT returns;
    • submit a quarterly return by the end of the month following the end of the quarter (even if there are no transactions);
    • pay the VAT due within the same deadline.

    The respective records shall be kept for a period of ten years from the end of the year during which the transaction was carried out.

    For businesses exclusively carrying out services under the special scheme the VAT relating to the purchase of goods and services and imports of goods carried out in Italy:

    • may not be deducted from the VAT due;
    • may only be claimed for refund pursuant to section 38-ter (1-bis) DPR 633/1972.

    NB: Taxable persons using the OSS non-EU scheme may exercise their right to deduct VAT for the purchase of goods and services and imports of goods made within Italy from the VAT applied to transactions carried out by the taxable persons in the same context of activities not subject to the special scheme.

     

    (ii) "One Stop Shop or OSS - EU" for all B2C services in the EU as well as intra-Community distance sales and domestic supplies of goods with dispatch and transport in the same Member State facilitated by electronic interfaces (new version of section 74-sexies).

    The following taxable persons may apply the above scheme, declaring and paying VAT via OSS-EU:

    • taxable persons domiciled in Italy, or residents who have not established their domicile abroad, in relation to the following transactions:
    1. all services supplied in the other Member States of the European Union to non-taxable persons (B2C);
    2. all intra-Community distance sales of goods;
    3. all supplies of goods facilitated through the use of electronic interfaces;
    • taxable persons domiciled or resident outside the European Union
    1. with a permanent establishment in Italy,
    2. who do not have a permanent establishment in the European Union. NB: Non-EU persons without a permanent establishment who dispatch or transport goods from Italy shall appoint a fiscal representative for registration purposes.

    and who dispatch or transport goods from Italy.

    NB: If a taxable person also has a permanent establishment in another Member State, the option may not be revoked before the end of the second year following that in which it was exercised.

    Taxable persons applying the OSS-EU scheme with regard to all transactions covered by such scheme:

    • are exempt from invoicing, registration and annual VAT returns;
    • submit a quarterly return by the end of the month following the end of the quarter (even if there are no transactions);
    • pay the VAT due within the same deadline.

    In the quarterly return with reference to

    • intra-Community distance sales of goods;
    • sales with dispatch and transport in Italy;

    if the goods are also dispatched or transported from other Member States, the taxable person shall also indicate in the quarterly return the VAT ID or the tax registration number assigned by each Member State of departure of the goods.

    In case of supplies made by electronic interfaces pursuant to section 2-bis (1)(a) DPR 633/1972 with dispatch and transport in Italy, the VAT ID or the tax registration number assigned by each Member State shall be included (if any).

    However, the respective records of the transactions carried out shall be kept for a period of ten years from the end of the year during which the transaction was carried out.

    For businesses exclusively carrying out services under the special scheme, the VAT relating to the purchase of goods and services and imports of goods carried out in Italy may not be deducted from the VAT due.

    NB: Taxable persons using the OSS-EU scheme may exercise their right to deduct VAT for the purchase of goods and services and imports of goods made within Italy from the VAT applied to transactions carried out by the taxable persons in the same context of activities not subject to the special scheme.

    (iii) "Import One Stop Shop" or "IOSS" for the distance sales of imported goods in consignments with a value of less than EUR 150 (new version of section 74-sexies.1),

    As of 1 July 2021, all goods imported into the EU are subject to VAT. The VAT exemption scheme at customs for goods with value less than EUR 22.00 has been abolished.

    In order to facilitate the collection of VAT due on the supply of "low value" goods, the IOSS scheme is introduced.

    In particular, taxable persons:

    • domiciled or resident in Italy who have not established their domicile abroad;
    • domiciled or resident outside the EU with permanent establishment in Italy;
    • domiciled or resident outside the EU with no permanent establishment in any EU Member State;
    • electronic interfaces facilitating distance sales of goods from third countries

    may fulfil VAT obligations relating to all distance sales of imported goods under section 38-bis (2)(3) of Decree-law 331/93 (except for goods subject to excise duty), with consignments of an intrinsic value not exceeding EUR 150 after registration in Italy only.

    NB: Taxable persons established in third countries without permanent establishment in Italy shall exercise the option through a tax representative appointed for the purposes of this special scheme (unless they are established in a third country with which the European Union has concluded a mutual assistance agreement in the field of VAT).

    Moreover, if a taxable person also has a permanent establishment in another Member State, the option may not be revoked before the end of the second year following that in which it was exercised.

    By applying IOSS, suppliers and marketplaces are allowed to collect VAT on sales of low-value goods shipped or transported from a non-EU country to customers in the European Union, as follows:

    • the import is exempt from VAT;
    • the tax is collected from the purchaser as part of the price and declared and paid through IOSS (section 74-sexies1 of DPR 633/72).

    Taxable persons applying the above scheme:

    • are exempt from the obligations of invoicing, registration, annual return;
    • submit for each month, by the end of the month following the one to which the return refers, even if no transactions have been carried out, a specific return;
    • pay the VAT due within the same deadline.

    For businesses exclusively carrying out services under the special scheme the VAT relating to the purchase of goods and services and imports of goods carried out in Italy:

    • may not be deducted from the VAT due;
    • may only be claimed for refund pursuant to section 38-ter (1-bis) DPR 633/1972.

    NB:   Taxable persons using the IOSS scheme may exercise their right to deduct VAT for the purchase of goods and services and imports of goods made within the territory of the State from the VAT applied to transactions carried out by the taxable persons in the same context of activities not subject to the special scheme.

     

    B) AMENDMENTS TO DECREE LAW 331/1993

    4. Intra-Community distance sales of goods (new 38-bis Decree Law 331/1993).

    Intra-Community distance sales of goods refer to:

    the supply of goods dispatched/transported by the supplier or on his behalf, even if the supplier intervenes indirectly in the dispatch/transport of the goods from:

    • a Member State other than the one of dispatch/transport to the purchaser;
    • a territory or third country with arrival of the goods in a Member State;

    to

    • natural persons who are not taxable persons;
    • international and consular bodies (pursuant to section 72 DPR 633/1972) and
    • taxable or non-taxable persons not required to apply VAT on intra-Community acquisitions and who have not opted for VAT application (excluding goods subject to excise duty).

    The above provision does not apply to:

    • to the supply of new means of transport;
    • to the supply of goods to be installed, assembled or fitted out by the supplier or on his behalf in the State in which the dispatch or transport of the goods ends.

     

    5. Territoriality of distance sales (new version of section 40)

    Intra-Community distance sales of goods dispatched or transported from another Member State of the European Union shall be deemed to be made in Italy if the place of arrival of the dispatch or transport is in Italy, by way of derogation from section 7-bis of DPR 633/1972.

    The above provision shall not apply if the supplier is established in another Member State and the following conditions are met:

    a. the supplier is established in only one Member State of the European Union;

    b. the total amount, net of VAT:

    1. of the supply of "TTE Services" to non-taxable customers established in Member States of the European Union other than the Member State where the supplier is established (pursuant to section 7-octies (3)(b) of DPR 633/72;
    2. of intra-EU distance sales of goods in the EU;

    has not exceeded in the previous year the threshold of EUR 10,000 and until, in the current year, this limit is not exceeded;

    c. the supplier has not opted for the application of VAT in the other EU Member State.

     

    6. Distance sales with goods leaving Italy (new version of section 41)

    Intra-Community distance sales of goods dispatched or transported to another Member State of the European Union shall be considered as non-taxable supplies.

    The above provision shall not apply if the supplier is established in Italy and the following conditions are met:

    a. the supplier is not also established in another EU Member State;

    b. the total amount, net of VAT:

    1. of the supply of "TTE Services" to non-taxable customers established in EU Member States other than Italy, pursuant to section 7-octies (3)(b) DPR no. 633/72;
    2. of intra-EU distance sales of goods in the EU; has not exceeded in the previous year the threshold of EUR 10,000 and until, in the current year, this limit is not exceeded;

    c. the supplier has not opted for the application of VAT in the other EU Member State.

    Distance sales of goods imported from third territories or third countries into Italy and dispatched or transported to another Member State shall also be considered as non-taxable supplies.

     

    Yours faithfully,

    HAGER & PARTNERS

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