what it is and how it works — idealista/news

The VAT ventilation of the fees is a methodology through which the registration of daily receipts is completed in accordance with the provisions of the law. It is a practice that involves recording the entire portion of the daily takings, regardless of the VAT rate applied, as a subsequent distribution is envisaged in proportion to the annual purchases. The VAT ventilation regime is particularly advantageous for specific categories, including retailers. It is important to keep in mind that this procedure is governed by art. 24 of Presidential Decree n. 633/72 and by Ministerial Decree 24.2.73.

What is the consideration ventilation method?

Ventilation of receipts is a method linked to the recording of sales receipts of retail traders. This procedure was created to make it easier for taxpayers required to register daily sales fees, given that it allows them to be exempted from the subdivision of daily sales according to the separate VAT rates of the different products. For practical purposes, the total amount of the day, including VAT, is noted in the register of fees (pursuant to art. 24 of Presidential Decree no. 633/72) or on electronic recorders without a breakdown by rate.

Who are the subjects who can benefit from VAT ventilation?

Italian law provides that i subjects who can take advantage of the VAT ventilation of the fees are retail traders. In fact, those who can use this methodology are retail traders authorized to sell goods included in one of the following categories:

• Articles of clothing and textiles
• Footwear
• Personal hygiene products
• Pharmaceutical products
• Foodstuffs
• Dietary products

Who cannot resort to the VAT ventilation of the fees?

The VAT ventilation of the fees cannot be applied to all traders and some exist exclusions. Indeed it does not apply to provision of services and, in the event that you wish to maintain this type of registration for the sale of goods, the fees for the services can be certified by invoice. Furthermore, the method cannot be applied starting from the following year, in the event that:

• have been carried out in the previous year purchases of other products for a amount exceeding 50% of purchases and imports;
• have been carried out in the previous year sales with invoice issue for an amount above 20% of the turnover (without calculating the invoices issued for the sale of properties and other capital goods).

The advantages of VAT ventilation of the fees

One of the main ones advantages of the VAT ventilation of the fees is yours simplicity. In fact, using this method, traders do not have to make a difference between the different VAT rates when registering sales, making everything simpler and faster. Furthermore, the VAT ventilation of the fees does not entail a tax benefitas the amount of tax to be paid at the end of the year will be the same as that which would have been paid by recording the amounts with separate VAT rates.

How the ventilation of the fees is carried out: the legal provisions

The decree provides that the subjects who avail themselves of the right to ventilate the fees must comply with the following provisions:

1. purchases and imports of goods intended for resale, distinguished by rates and separately from purchases or imports of other goods, must be noted in the purchases register (art. 25 Presidential Decree 633/1972);
2. at the end of each month or quarter, the overall amount, gross of VAT, of purchases and imports of goods intended for resale registered in the same period must be determined, broken down by rate, and this amount must be cumulated with that relating to goods intended for resale purchased or imported in previous months or quarters;
3. having done this, it is necessary to establish, on the basis of the cumulation obtained, the composition ratio of each group of goods subject, within the cumulation, to different rates;
4. the overall amount of the considerations recorded in the month or quarter, before tax, must therefore be divided by applying the previously determined composition ratios of purchases or imports;
5. the VAT contained in them must be separated from the fees thus distinguished (e.g.: fees at 22%, divide by 1.22 and multiply the result by 0.22);
6. determine, after deducting the VAT relating to all goods and services purchased and imported, the VAT to be paid for each month or quarter;
7. the annual return must therefore indicate the overall amount of the fees recorded in the year, divided into rates according to the composition ratio of all purchases and imports of goods intended for resale registered in the year, determining the relevant tax through the application of this ratio to the total amount of the fees.

How to calculate the VAT ventilation of the fees: operating procedure

To carry out the calculation for the VAT ventilation of the fees, it is necessary to follow a specific operating procedure. This procedure includes the following steps:

1. Sum of purchases: it is necessary to add the amount of purchases of goods intended for resale, broken down by rate, made in the same period, together with the amount of goods from previous periods.
2. Indication of the percentage composition ratio: subsequently, the percentage composition ratio must be established for each group of purchases subject to the different rates.
3. Implementations of composition percentages: the composition percentages of the purchases must then be applied to the total of the registered fees, thus establishing the ventilation of the fees.
4. Separation of VAT: finally, the VAT contained in the amounts obtained must be separated by applying the appropriate percentages.

Example of ventilation of fees: practical case

Suppose that a trader buys 3 goods during the year, each at a cost of 100.00 + VAT. As can be seen in the table below, the 3 goods each have a rate of 4%, 10% and 22%:

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