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Italy must reconsider ancillary costs on VAT imports

  • Nov 19, 2013 | Richard Asquith

Italy must reconsider ancillary costs on VAT imports

The European Commission has instructed Italy to revise its policies on charging VAT on ancillary costs for imports.  This has come by way of a formal demand under the requirements of the EU VAT Directive.

VAT exempt ancillary import costs

Goods brought into the European Union for the first time are subject to Value Added Tax of the country of import – 22% in the case of Italy VAT.  However, the costs of transport to the point of destination are exempt.

The European Commission has now asked Italy to change this term as a Reasoned Opinion.  Italy must comply within 60 days or face further legal action.  This could include a referral to the European Court of Justice, the highest court of appeal for EU legal matters.

In addition to this issue, the EC has requested that Italy remove the bank guarantee requirement for refunds of Italian VAT credits and refunds.  Many EU businesses suffer long delays, stretching into years, on credits and refunds, and then have to suffer the bank fees of providing guarantees to the Italian state for a number of years.

VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He can be contacted at: He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.