Ministerial Decrees dated 4 and 9 December 2024 further tighten the rules governing the appointment of VAT representatives in Italy and registration in the VAT Information Exchange System (VIES) archive (for prior coverage see the article in the April 2024 issue of Indirect Tax News). The decrees impose obligations on both the VAT representative and non-EU taxable persons and are relevant to non-EU taxable persons conducting VATable transactions in Italy that fulfil their VAT obligations by means of a VAT representative and wish to carry out intra-Community transactions that require inclusion in the VIES database (such as purchases and sales of goods and services with other European taxable persons). The decrees will become effective once the tax authorities issue implementing rules.
The decrees clarify that the appointment of a VAT representative is subject to the fulfilment of subjective and ethical requirements. Specifically, a VAT representative must:
The decrees also clarify that the VAT representative must submit a self-declaration to the tax office where the VAT representative has its legal office certifying that all requirements have been met.
In addition, the decrees provide that a person/entity that wishes to be appointed as a VAT representative must provide the Italian tax authorities with a guarantee that is valid for at least 48 months, with the guarantee amount based on the number of entities represented:
Taxable persons that are already operating as VAT representatives on the date the authorities publish implementing rules must certify that the above requirements are met and provide the guarantee within 60 days.
Failure to comply with any of the above rules will result in the VAT representative being informed that the procedure for deleting VAT registration will be initiated with respect to the represented entities. If the representative has not submitted the guarantee within 60 days from the date of receipt of the notice, the VAT registration of the represented entities will be automatically cancelled.
Non-EU resident taxable persons that have a VAT representative will be required to provide to the Italian tax authorities a guarantee of at least EUR 50,000 in one of the above-mentioned forms that will be valid for at least 36 months. Once the 36-month period expires, the taxable person will be free to operate without the guarantee. The tax authorities will be issuing implementing regulations about the guarantee within 120 days from the date the decree was published.
Taxable persons already registered in Italy and that operate by means of a VAT representative (whose VAT number is registered in the VIES archive) also will be required to submit the guarantee within 60 days after publication of the implementing rules. Failure to comply will result in removal from the VIES archive upon notification by the tax authorities to their fiscal representative in Italy.
Francesco Grandolfo
Marco Bonfiglio
BDO in Italy
Changes for the VAT representative
The decrees clarify that the appointment of a VAT representative is subject to the fulfilment of subjective and ethical requirements. Specifically, a VAT representative must:
- Not be convicted, sentenced or have pending criminal proceedings for financial offences;
- Not have committed serious and repeated violations of the provisions on contributions and taxation; and/or
- Not be ineligible or unable to hold certain offices.
The decrees also clarify that the VAT representative must submit a self-declaration to the tax office where the VAT representative has its legal office certifying that all requirements have been met.
In addition, the decrees provide that a person/entity that wishes to be appointed as a VAT representative must provide the Italian tax authorities with a guarantee that is valid for at least 48 months, with the guarantee amount based on the number of entities represented:
- One entity represented: No guarantee is required, but the self-certification must be completed;
- Two to nine entities represented: A guarantee with a maximum value of EUR 30,000;
- 10 to 50 entities represented: A guarantee with a maximum value of EUR 100,000;
- 51 to 100 entities represented: A guarantee with a maximum value of EUR 300,000;
- 101 to 1,000 entities represented: A guarantee with a maximum value of EUR 1 million; and
- More than 1,000 entities represented: A guarantee with a maximum value of EUR 2 million.
- Government securities;
- State-guaranteed securities;
- A bank guarantee; or
- A surety policy.
Taxable persons that are already operating as VAT representatives on the date the authorities publish implementing rules must certify that the above requirements are met and provide the guarantee within 60 days.
Failure to comply with any of the above rules will result in the VAT representative being informed that the procedure for deleting VAT registration will be initiated with respect to the represented entities. If the representative has not submitted the guarantee within 60 days from the date of receipt of the notice, the VAT registration of the represented entities will be automatically cancelled.
VIES Obligations
Non-EU resident taxable persons that have a VAT representative will be required to provide to the Italian tax authorities a guarantee of at least EUR 50,000 in one of the above-mentioned forms that will be valid for at least 36 months. Once the 36-month period expires, the taxable person will be free to operate without the guarantee. The tax authorities will be issuing implementing regulations about the guarantee within 120 days from the date the decree was published.Taxable persons already registered in Italy and that operate by means of a VAT representative (whose VAT number is registered in the VIES archive) also will be required to submit the guarantee within 60 days after publication of the implementing rules. Failure to comply will result in removal from the VIES archive upon notification by the tax authorities to their fiscal representative in Italy.
Francesco Grandolfo
Marco Bonfiglio
BDO in Italy