The Italian tax authority on 27 February 2020 issued guidance—Statement of Practice no. 96911/2020—concerning changes made to the rules on “letters of intent” regarding the value added tax (VAT) relief process for certain exporters.
The statement of practice outlines new procedures to be applied so that “habitual exporters” (esportatori abituali) can conduct transactions and make purchases without the application of VAT (these measures are pursuant to amendments enacted under Law Decree no. 34 of 30 April 2019). Read TaxNewsFlash
These changes for habitual exporters and the letters of intent are effective today, 2 March 2020.
Law Decree no. 34 of 30 April 2019 implemented the rules concerning letters of intent, with an effective date of 1 January 2020.
Under the previous rules, “habitual exporters” had to provide their suppliers with a copy of the letter of intent and a filing receipt from the Italian tax authority. If the supplier issued a zero-rated invoice before obtaining this documentation and prior to verifying the documentation’s validity on the tax authority’s website, a fixed penalty ranging from €250 to €2,000 was to be applied.
On 1 January 2020, the following measures were effective:
The statement of practice outlines the new procedures to be applied so that habitual exporters can make purchases without the application of VAT, in light of the changes made by Law Decree no. 34 of 30 April 2019.
Effective 2 March 2020, the Italian tax authority will provide information for each supplier’s cassetto fiscal about letters of intent that are electronically filed with the tax authority. In addition, a new letter of intent template (Form DI) will be available with updated instructions. Form DI no longer contains a box for the progressive number assigned to the letters of intent and is now suitable also for letters of intent issued by VAT group members. The prior version of the form can be used until 27 April 2020.
Read a March 2020 report [PDF 202 KB] prepared by the KPMG member firm in Italy
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