Tax representation and VAT warehousing allow national and foreign subjects to carry out operations in Italy benefiting from some tax advantages. Let us look at them.
Tax representation in Italy
Tax representation allows foreign companies (EU or non-EU) that carry out transactions relevant for VAT purposes to recover the tax paid to Italian suppliers. Through the appointment of a tax representative in Italy, the foreign company retains the status of a non-resident subject, but at the same time becomes the recipient of the rights and duties provided for by the national tax legislation. For example, you can use the VAT credit limit provided for the customary exporter.
What does the tax representative do?
This figure is responsible for the obligations envisaged by the law relating to the payment of taxes, invoicing and document registration, and will exercise the rights related to the application of the VAT regulations on behalf of the foreign company that it represents.
In the event that intra-community transactions are carried out, which are not subject to the obligations of tax payments, the law provides for another type of representative, the so-called “light tax representative“. This figure is only required to issue invoices for the operations carried out and to present the Intrastat declarations, while there is an exemption from the charges regarding the registration and presentation of the annual VAT return.
The appointment of a tax representative is mandatory when the foreign company supplies goods or services within the Italian State with subjects acting as private consumers or subjects not established in Italy, and in all other cases governed by the law on intra-Community trade.
What is the VAT warehouse?
The VAT warehouse is a storage area, located within the Italian territory, in which national and Community goods, or goods imported from countries outside the EU, can be stored, in order to benefit from some tax benefits. The use of this warehouse allows the payment of VAT to be postponed until the goods leave the warehouse, applying the tax according to their destination: taxable internal delivery, non-taxable export or intra-community delivery.
VAT warehouses are similar to customs warehouses, but there are three differences:
- 1. They do not receive non-EU goods, namely goods that have not paid import duty in the EU;
- 2. They are not subject to permanent checks by customs authorities;
- 3. The physical introduction of the goods into the warehouse is a compulsory requirement.
From 1/04/2017, all supplies of goods can be made without paying tax by inserting the goods in a VAT warehouse, regardless of the place of establishment of the transferee and the category of the goods in question.
As a customs forwarding agent, EAAMS can provide all foreign companies with tax representation in Italy and a VAT warehouse of 1,000 square metres in Marghera (VE), in order to facilitate customs and tax operations related to the entry of goods into our country and their transfer to third parties.