NEWSLETTER N. 18 - 2021

  • NEWSLETTER 18-2021

    Dear clients,
    please find below a summary of the most important as-pects of e-invoicing for transactions to and from San Marino.

  • E-INVOICING BETWEEN ITALY AND THE RE-PUBLIC OF SAN MARINO

    The implementing rules of the provisions on electronic invoicing of transactions to and from San Marino provided for in section 12 of Italian Legislative Decree 34/2019 (newsletter no. 14/2019) were established by Italian Ministerial Decree of 21 June 2021. According to said Decree, the following shall apply:

    • from 1 October 2021 to 30 June 2022, electronic invoices may be issued via the SdI platform as an alternative to paper invoices;
    1. from 1 July 2022, e-invoicing (with the "exceptions provided for by law" (section 12 of Italian Decree-Law 34/2019 and section 2(2) of the Italian Ministerial Decree of 21 June 2021)) is mandatory for transactions to and from San Marino. Hence, invoices in analogous form may no longer be issued.

     

    SCOPE OF APPLICATION AND DATE OF EXECUTION OF THE TRANSACTIONS

    The supplies of goods to San Marino (by means of transport or consignment) and the related services carried out by VATable persons who are resident, established or identified in Italy to economic operators who have communicated their identification number assigned to them in the Republic of San Marino are not taxable under section 8 and 9 DPR 633/1972.

    The dispatch of goods to San Marino by means of transport or forwarding by taxable persons in Italy or by third parties on their behalf is treated as a supply.

    However, the following shall not be treated as the mentioned supplies:

    • the importation into Italy of goods which have undergone expert appraisal, processing or usual handling intended to preserve the goods, improve their appearance or marketability or prepare them for distribution and resale, if the goods are subsequently transported or dispatched to the customer; and
    • the importation into the Republic of San Marino of goods temporarily used for the provision of services.

     

    The provision applies on condition that the transactions are recorded in a corresponding register kept and maintained in accordance with section 39 DPR 633/1972 and that the corresponding reason is indicated in the transport document.

    In the case of an "import" of goods from the Republic of San Marino to Italy, VAT is paid in accordance with section 71 DPR 633/1972;

     

    However, the following shall not be considered as importation of goods into Italy:

    • The dispatch of goods which have undergone expert appraisal, processing or usual working aimed at preserving the goods, improving their appearance or marketability or preparing them for distribution and resale, if the goods are subsequently transported or dispatched to the principal, economic operator in San Marino;
    • the importation into Italy of goods temporarily used for the provision of services.

     

    TIME OF EXECUTION

    Transactions shall be deemed to have been effected on the date of commencement of the transport or dispatch to the buyer or to third parties on the buyer's behalf from Italy or the Republic of San Marino.

    If the transferring or juridical effects occur only after the delivery or dispatch, the time of execution shall be the time when these effects occur, but in any case after the expiry of one year from the delivery or dispatch.

    If, prior to the occurrence of the above-mentioned events - irrespective thereof -:

    • an invoice is issued; or
    • the consideration has been paid in full or in part;

    the transaction, limited to the amount invoiced or paid, shall be deemed to have taken place on the invoice or payment date.

     

    OBLIGATION TO E-INVOICING

    Deliveries of goods in the context of trade relations between Italy and the Republic of San Marino shall be certified by an electronic invoice issued through the SdI platform.

     

    SUPPLY OF GOODS TO SAN MARINO

    Electronic invoices issued by VATable persons resident, established or identified in Italy for the supply of goods dispatched or transported to the Republic of San Marino to economic operators who have communicated the identification number allocated to them by the Republic of San Marino:

    • show the identification number of the San Marino buyer; and
    • shall be submitted by SdI to the San Marino tax office, which:
    1. after establishing that the import tax has been duly paid;
    2. confirms the correctness of the invoice; and
    3. communicates the result of the check to the competent Italian tax authority by the appropriate electronic means.

    The Italian economic operator receives the result of the control carried out by the San Marino tax office electronically via a corresponding electronic channel of the Italian tax authority:

    Please note:  If the tax office has not confirmed the correctness of the invoice within four months of its issue, the Italian economic operator shall issue a notice of amendment (pursuant to Art. 26 DPR 633/1972) within the following thirty days without incurring penalties and interest.

     

    ISSUE OF PAPER INVOICES

    Economic operators resident, established or identified in Italy who are not obliged to issue an electronic invoice for supplies of goods dispatched or transported to the Republic of San Marino may issue the invoice in electronic form or, alternatively, in paper form.

    The paper invoice is issued in three copies, two of which are sent to the buyer.

    Please note: If the Italian economic operator has not received a copy of the paper invoice stamped by the tax office from the buyer within four months of the invoice being issued, he must notify the San Marino tax office and the Italian tax authority (FAO). If he has not received the copy of the stamped invoice within thirty days, he issues a notice of amendment in accordance with section 26 DPR 633/1972 without incurring penalties and interest.

     

    NON- VATABLE SUPPLIES

    The supply of goods dispatched or transported to the Republic of San Marino to economic operators with a known identification number, accompanied by the transport document or an equivalent document, is not VATable under section 8 and 9 of DPR 633/1972, provided that:

    • in the case of an electronic invoice, the San Marino tax office has certified that the invoice is correct;
    • in the case of a paper invoice, the seller has a copy of the invoice returned by the buyer in San Marino, stamped with the date and bearing a round embossed stamp together with the official coat of arms of San Marino with the wording "Rep. San Marino - Uff. tributario".

    If these conditions are not met, the seller must correct the invoice.

     

    DELIVERIES OF GOODS TO ITALY

    Electronic invoices issued by economic operators with an identification number assigned by them in the Republic of San Marino for the supply of goods shipped or transported to Italy and accompanied by a transport document or any other equivalent document shall be

    • submitted by the San Marino tax office to the SdI platform, which
    • are sent to the buyer, who gets access to them through an appropriate electronic channel of the Italian tax authority.

     

    ELECTRONIC INVOICE CHARGING VAT

    If the electronic invoice charges the VAT that the buyer shall pay, then - in relation to the nature of the goods supplied and the consideration for the transactions:

    • the VAT is paid by the economic operator in San Marino to the San Marino tax office;
    • he San Marino tax office will transfer the amounts received to the Italian tax authority within 15 days and will send the electronic recapitulative statement of invoices in connection with these payments;
    • he Italian tax authority shall then check within 15 days whether the payments received and the invoice data contained in the statements correspond and inform the San Marino tax office thereof.

     

    In case of:

    • a discrepancy between the invoice data and the payments received, the Italian tax authority shall request the San Marino tax office to make the appropriate adjustments.
    • insufficient payments, the San Marino tax office will make the appropriate adjustments;
    • overpayments will be reported by the Italian tax authority to the San Marino tax office.

    Please note: The San Marino tax office and the buyer will be notified about the successful control by the Italian tax authority. From this moment on, the buyer may deduct VAT according to section 19 et seq. DPR 633/1972.

     

    ELECTRONIC INVOICE WITHOUT VAT

    If the electronic invoice does not charge the VAT due in relation to the nature of the goods sold and the consideration for the transactions carried out, the Italian economic operator to whom the invoice was sent via the SdI platform will deduct the VAT in accordance with section 17 (2) DPR 633/1972, adding the VAT due in accordance with the procedures laid down by the Italian tax authorities.

    The invoices shall be entered in the registers in accordance with the provisions of section 17(2) of DPR 633/1972.

     

    ISSUE OF THE INVOICE IN PAPER FORM

    Economic operators with an identification number in San Marino who do not issue an electronic invoice shall issue a paper invoice in accordance with sections 21 and 21-bis of DPR 633/1972 for the goods dispatched or transported to Italy together with the transport document or other document.

     

    PAPER INVOICE CHARGING VAT

    If the paper invoice charges VAT due by the buyer, the seller, as a economic operator in San Marino shall:

    • issue an invoice in triplicate showing both the identification number and the VAT number of the Italian buyer;
    • submit to the San Marino tax office said invoices in triplicate, together with the recapitulative statement;
    • pay to the San Marino tax office the VAT due;
    • provide the Italian buyer with the original invoice returned by the San Marino tax office with date stamp and embossed stamp.

     

    The San Marino tax office, to which the above documents are sent, will in turn:

    • record the data on the individual invoices and submit the corresponding recapitulative statements;
    • within 15 days, pay the amounts received to the Italian tax authority and submit three copies of the invoices received and three copies of the corresponding recapitulative statements of the San Marino sellers.

    The Italian tax authority shall, within 15 days from the receipt of the documents

    • verify the correspondence between the payments received and the dates of the invoices in the recapitulative statements and inform the San Marino tax office thereof;
    • return to the San Marino tax office the original and one copy of the invoices, two copies of the corresponding  recapitulative statements and, as proof, a copy of the transfer note stamped or dated by the Office and signed by the competent person or official;
    • retain a copy of the invoices as proof that the tax has been collected.

     

    In case of:

    • a discrepancy between the invoice data and the payments received, the Italian tax authority shall request the San Marino tax office to make the appropriate adjustments.
    • insufficient payments, the San Marino tax office will make the appropriate adjustments;
    • overpayments will be reported by the Italian tax authority to the San Marino tax office.

    The Italian economic operator will register the original invoice sent to the seller by San Marino in accordance with section 25 DPR 633/1972 and will claim the tax deduction in accordance with section 19 et seq. DPR 633/1972.

     

    INVOICE IN PAPER FORM WITHOUT INDICATION OF VAT

    If the paper invoice does not charge VAT in relation to the nature of the goods transferred and the consideration for the transactions, San Marino economic operators shall:

    • issue the invoice in duplicate showing both the identification number and the VAT number of the Italian purchaser;
    • submit the two invoices in duplicate to the tax authorities, together with the list;
    • send the purchaser one of the two copies of the invoices returned stamped by the tax office.

    Italian economic operators:

    • pay VAT in accordance with section 17(2) DPR 633/1972 and show the amount on the copy of the invoice sent by the supplier in San Marino.
    • register the invoices in the registers pursuant to section 23 and 25 DPR 633/1972 in accordance with the modalities and deadlines set therein and may deduct VAT by way of VAT recourse pursuant to section 19 et seq. DPR 633/1972.

     

    ELECTRONIC INVOICING FOR SERVICES

    For services rendered to economic operators with a known identification number in the Republic of San Marino, the invoice may be issued in electronic form via the SdI platform in accordance with section 21(6-bis)(b) DPR 633/1972, which submits it to the tax office for further submission to the client.

     

    DISTANCE SALES

    Sales of goods, other than new means of transport, dispatched or transported by or on behalf of the supplier (even if the supplier is indirectly involved in the transport or dispatch of the goods) from a country other than the country of destination of the dispatch or transport to private consumers are taxed in the country of destination if the vendor made distance sales to residents of that other country in the previous calendar year for a total amount exceeding EUR 28,000 and this threshold was not exceeded in the current year. Below this threshold, however, the seller may opt for the application of VAT in the country of destination of the goods.

     

    USE OF THE SOIL PLATTFORM

    With ruling no. 211273 of 05 August 2021, the Italian tax authority has provided as follows:

    • invoices relating to supplies of goods between resident, established or identified entities in Italy and entities resident in the Republic of San Marino shall be exchanged via the SdI platform;
    • the creation, submission and receipt of electronic invoices are governed by the rules set out in the decision of the CEO of the Italian tax authority of 30 April 2016.
    • the San Marino tax office is responsible for processing incoming and outgoing electronic invoices and is considered a certified interface of the SdI platform.
    • incoming and outgoing invoices relating to San Marino are available in the portal of the Italian tax authority "invoices and remunerations".

    Please note that the San Marino tax office has published the recipient code to be indicated in the XML file of the electronic invoice. The 7-digit number and letter sequence is "2R4GTO8".

     

    Yours sincerely,

    HAGER & PARTNERS

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