Back in the days, you were required to set up an entity in Italy or have a fiscal representative located here; this process is costly and develops multiple tax and accounting issues.
The Council Directive 2000/65/EC introduced the direct registration to smooth the process up!
The VAT direct registration in Italy applies to all entities within the EU that have a VAT number in their own country. Furthermore, the direct registration is required only if the entity wants to sell to individuals with no VAT number in ITALY! HOW DOES IT WORK?
The process is quite simple, the foreign entity has to file the demand on paper and send it to the Tax authority; the whole process usually requires 1 month.
Then, the tax authorities release the Italian VAT code.
If the information included in the form is not sufficient, the tax authority can require integrations and amendments; that’s why a local tax practice is often suggested in order to speed the whole process up.
WHAT HAPPENS NEXT?
After the entity has its VAT number, it can operate freely in the Italian market selling to individuals. At this point, the entity has to comply with local VAT rules, filing returns and paying any tax liability due within the required time period. If you need further information regarding the Italian VAT rules, check this post.
WHY IS IT GOOD?
Direct registration involves no Permanent Establishment within the Italian territory, therefore tax authorities cannot claim for income generated in Italy and it is all taxed in the resident country.
If you need any help in direct registration, Accounting Bolla has a successful track of direct registration! We are glad to help!
Hi Bella
I am an individual tax resident in France not registered for vat. I want to buy and import from Italy a new tractor. Despite the eu rules which state that VAT on new vehicles must be paid in the country where the new vehicle is first registered, the Italian seller (vat registered) insists he must charge vat at 22%. Upon import I must pay french vat 20%, but once I have the receipt for the french vat paid the “Quitus Fiscal” it is possible I believe to reclaim the 22% vat already paid in Italy from the Italian authorities.. Is this the case, can you help and what would you charge? The vat amounts to 3400 euros. Many thanks Lee sharp
You can recover the Italian VAT through the EU refund procedure. This has to be done via the French tax office
Dear Dott. Bolla,
Can you please contact me regarding an RfP aiming at the direct VAT ID in Italy for a Dutch company? Looking forward. Thx.
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