close
Share with your friends

Italy: Guidance on reporting remote sales by marketplace operators

Italy: Guidance on reporting remote sales

The Italian tax authorities on 1 June 2020 issued guidance (Circular no. 13/E) to clarify the reporting obligations for remote (or distance) sales.

1000

Related content

In the guidelines for reporting remote sales, the Italian tax authorities are viewed has having taken a strict (and unexpected) approach regarding the liability of marketplace operators.


Reporting obligations

If a marketplace operator fails to transmit the information regarding remote sales by the deadline, or transmits incorrect or incomplete information, that marketplace operator is deemed to have received or supplied the goods itself and is liable to pay value added tax (VAT) on the supplies for which it has failed to send (or has sent incomplete) information, unless it can prove that:

  • The VAT has been paid by the supplier; or
  • In the case of incomplete or incorrect information, the marketplace operator did not and could not reasonably have known that this information was incomplete or incorrect.

To prove that VAT was paid by the supplier, the marketplace operator must present appropriate documentation (such as copies of the F24 payment forms, wire transfer receipts, VAT returns) proving that the merchants correctly accounted for and paid VAT on the sales made through the marketplace.

In order to prove that it did not and could not reasonably have known that the information was incomplete or incorrect, the marketplace operator must implement an internal due diligence system, to collect and review all the information required for reporting purposes. If the marketplace operator discovers through its due diligence review that certain details were incorrect or incomplete, it can rectify and complete these items by filing a corrective report by the end of the month after that when the initial report was due. In this situation, it will pay “negligible” reduced penalties.

If, however, a marketplace operator does not submit its initial report by the proper deadline (by the end of the month after the relevant quarter), no corrective report can be filed by the second month after the relevant quarter, and it will be liable for the Italian VAT on the sales for which it has failed to send information, unless it can prove that the VAT has been paid by the supplier.

The circular also clarifies that, whether or not the sales are over the reporting thresholds, the reporting obligations apply to both incoming and outgoing distance sales in Italy—i.e., whether an EU merchant sells to an Italian final customer or an Italian merchant sells to an EU final customer. This is intended to be a simplification for marketplaces, which are not in a position to know whether or not merchants (selling over different platforms/portals) are breaching the threshold for remote sales.


Implications of proposed delay of VAT directive

The European Commission, in taking in consideration difficulties that businesses and EU Member States are encountering because of the coronavirus (COVID-19) pandemic, recently proposed to postpone the entry into force of EU Directive 2017/2455 (the directive that would bring into effect the new article 14(a) of the VAT Directive).

The EC has proposed postponing the application of the VAT e-commerce package by six months; therefore, these rules might apply as of 1 July 2021 (instead of 1 January 2021).

If the directive is postponed, the Italian reporting obligations for remote may remain in force (pending confirmation from the Italian government) until the new effective date for the EU rules (until 30 June 2021).

Read a June 2020 report [PDF 147 KB] prepared by the KPMG member firm in Italy

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal