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Italy: Transition rule if “no-deal” Brexit; VAT and other taxes

Italy: Transition rule if “no-deal” Brexit; VAT

A “law decree” provides guidance for various Italian industries and sectors in the event of a “no-deal” Brexit—including specific measures concerning value added tax (VAT).


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The law decree (Decreto Legge no. 22 of 25 March 2019) was published in the Italian official gazette on 26 March 2019 to address tax rules for banks, insurance, financial institutions and, to a certain extent, consumer and industrial markets in the event of a no-deal Brexit.

  • In general, the law decree provides that existing Italian tax law provisions—including those related to an EU directive—that are currently effective as a result of the UK’s membership in the EU will continue to apply for an 18-month transition period, starting from the effective date of a no-deal (“hard”) Brexit.
  • The law decree also specifically provides that Italian law provisions implementing EU directives or regulations with regard to VAT and excise taxes (duties) will continue to apply during the 18-month transition period “if compatible” with a new legal framework.

The Italian Ministry of Finance is directed to issue decrees to implement these general provisions during the transition period.

KPMG observation

Tax professionals anticipate that any guidance issued by the Finance Ministry would clarify what are “compatible” conditions.

Read an April 2019 report [PDF 75 KB] prepared by the KPMG member firm in Italy

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