VAT OBLIGATIONS IN ITALY

How is the tax period determined in Italy? 

Quarterly

The tax period is one quarter [standard tax period]. Your company has to report its VAT position by filing a quarterly VAT return. A listing of clients and providers is also required.

When should periodical VAT return be filed?

Quarterly VAT returns must be filed by electronic means before the  16th ofthe month following the quarter.

VAT Directive

The tax period shall be set by each Member State at one month, two months or three months. Member States may, however, set different tax periods provided those ones do not exceed one year. The VAT return shall be submitted by a deadline to be determined by Member States. That deadline may not be more than two months after the end of each tax period.

Your company is required to submit an annual VAT return by the end of February.

Amending annual VAT returns

In case of corrections in favor of the company, it will be possible to amend the annual VAT return until December 31 of the fifth year following that in which the return is submitted.

VAT Directive

Member State may require taxable persons to submit a return in respect to all transactions carried out in the preceding year. That return shall provide all the information necessary for any adjustments.

 

Are quarterly filings allowed by the country and what is the filing deadline?

The recapitulative statement [ESL] must be drawn up for each calendar month. Taxpayers can however opt for filing the Statement on a quarterly basis provided the intra-EU transactions do not exceed € 50.000 within the past four quarters. The statement has to be filed before the 25th day of the month following the reporting period [month/quarter] to which it relates.

VAT Directive

The recapitulative statement shall be drawn up for each calendar month. However, Member States, in accordance with the conditions and limits which they may lay down, may allow taxable persons to submit the recapitulative statement on each calendar quarter where the total quarterly amount of intra-EU supplies of goods does not exceed either in respect of the quarter concerned or of any of the previous four quarters the sum of € 50.000 or its equivalent in national currency. The recapitulative statement shall be submitted within a period not exceeding one month.

What is the payment deadline?

In case VAT due results from the annual VAT return, payment should be made before March 16th of the next year.

Are interim payments required?

Periodical VAT calculations [liquidazioni IVA]. Interim payments are due on a monthly or a quarterly basis. The VAT due must be paid before the 16th day of the month following the period  [or the 16th day of the second month following the quarter].

VAT Directive

Any taxable person liable for the payment of the VAT must pay the net amount of the VAT when submitting the VAT return. Member States may, however, set a different date for payment of that amount. Member States may require interim payment to be made.

 

Is any VAT credit automatically carried forward or refunded?

A VAT credit resulting from a periodic VAT settlement or from the annual VAT return is in principle automatically carried forward to the next period, unless a tax refund has been applied for.

Input VAT recovery – Statutory period of limitation

Up to day, input VAT could be recovered at the latest within the annual VAT return at the end of the second year following the year in which the VAT became payable. Under the new regulation, input VAT has to be reported no later than in the annual VAT return of the same year where VAT is charged, i.e. VAT on purchases made in 2017 will need to be included in the 2017 annual return to be submitted by April 30th 2018.

This new regulation is already being challenged and amendments might arise. Updated information will follow if needed.

VAT Directive

Where, for a given tax period, the amount of deductions exceeds the amount of VAT due, the Member States may, in accordance with conditions which they shall determine, either make a refund or carry the excess forward to the following period. However, Member States may refuse to refund or carry forward if the amount of excess is insignificant.