The Italian tax authorities published Notice no. 11/E (6 May 2020) providing some additional guidance on the value added tax (VAT) provisions under Law Decree no. 18/2020 (referred to as “Cure Italy” decree) and Law Decree 23/2000 (referred to as the “Liquidity” decree).
Return due dates, as deferred
The Cure Italy decree (article 62) generally postpones to 30 June 2020 the deadlines for all tax obligations and filings (other than tax payments) falling between 8 March 2020 and 31 May 2020 for taxpayers with a tax domicile, registered office or operations centre in Italy. The May 2020 notice specifies that this postponement applies with regard to the following:
Deferral of VAT payments due for March and April 2020 for members of VAT pooling arrangements or VAT groups
Article 18 of the Liquidity decree allows for deferral of certain tax payments—including VAT, withholding tax, and social contributions—that were originally due in April and May 2020 for taxpayers whose tax (fiscal) domicile, registered office or operations centre is in Italy. This rule applies for:
The tax authority previously clarified that taxpayers adopting either VAT pooling arrangements or VAT group schemes (when, for instance the revenues or turnover may not be met by all the pooling or group members) were entitled to suspend VAT payments of all the pooling or group if the member(s) representing the majority of turnover or revenues of the pooling or group met the revenues or turnover decrease conditions.
The May 2020 notice clarifies that if only some of the members satisfy the conditions for the VAT payment deferral (when considered singularly) without these conditions being satisfied at a pooling or group level, the eligible members may benefit from the tax deferral and be excluded from the calculation of the VAT payable by the pooling or group by 18 May 2020.
Postponement of VAT filings for non-established taxpayers if VAT-registered in Italy
A provision (article 62) of the Cure Italy decree concerns postponement of VAT filings and provides that this relief is reserved for those taxpayers whose tax (fiscal) domicile, registered office or operations centre is located in Italy, thereby apparently excluding from the scope of the provision those taxpayers not established in Italy but that are VAT-registered in Italy (through either a “direct” registration or an Italian fiscal representative).
The May 2020 notice, however, has interpreted the law provision broadly and allows for the postponement of VAT filings (listed above) by non-established taxpayers VAT that are VAT-registered in Italy.
This “clarification” gives rise to further questions whether non-established, but VAT-registered, taxpayers could also be entitled to benefit from the deferral (under certain conditions) regarding VAT payments due by 16 April 2020 and 18 May 2020 (those that are for March and April 2020, respectively). The legislative text of the decree law seems to exclude non-established taxpayers from this provision (also considering that it is unclear whether the non-established taxpayers need to test the revenues / turnover decrease conditions on Italian rather than on worldwide turnover). Nonetheless, if a taxpayer applied the same extensive approach adopted by the May 2020 notice for the postponement of the VAT filings also to this provision, VAT-registered taxpayers meeting the revenues’ decrease condition apparently could be entitled to benefit from the suspension for VAT payments. Pending confirmation from the tax authorities, non-established but VAT-registered taxpayers need to consider making VAT payments by 18 May.
Read a May 2020 report [PDF 156 KB] prepared by the KPMG member firm in Italy
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