Italy imposes marketplace VAT fraud obligations
- Feb 16, 2019 | Richard Asquith
Italy is making online marketplaces the deemed supplier and VAT principal on B2C sales below €150 by non-EU third party sellers. The measure will apply to consumer electronics, such as mobile phones, video games, tablets, games consols etc. It covers imports from non-EU, third countries.
Instead of the non-EU seller being responsible for VAT reporting under distance selling or import rules, the market place will first acquire the goods from the seller as a B2B, nil-rated transaction, and then provide a local sale to the consumer with Italian VAT. The marketplace will then be responsible for charging, collecting and remitting VAT to the Italian tax authorities.
Non-EU sellers affected must still appoint a local representative in Italy.
The Italian law change mirrors a 2021 proposal by the European Commission, and appears to be in advance of this proposal being adopted into the EU VAT Directive. This would put into question this derivation into question. Whilst the implementing law was gazetted on 12 February, it is not yet clear when it will be enforced.
Need a fiscal representative in Italy?
Non-EU businesses selling in Italy will need to appoint a fiscal representative alongside completing VAT registration and returns.
Fiscal representatives are responsible for the accurate VAT submissions of their non-EU clients.
Avalara offers a Fiscal Representative Service as part of its international VAT and GST Registration and Returns Service.
Need help with your Italian VAT compliance?
Researching Italian VAT legislation is the first step to understanding your VAT compliance needs. Avalara has a range of solutions that can help your business depending on where and how you trade.