Globalization has made commercial operations between companies from different countries increasingly common, creating opportunities but also complexities in the tax field. One of the most critical aspects to manage for Italian companies carrying out non-EU operations is the correct application of VAT. Regulations governing VAT in international transactions are critical to ensuring tax compliance and optimizing tax management.
This article aims to provide a complete and detailed guide on the VAT regulation of transactions with non-EU counterparties.
Direct and indirect e-commerce
The online sales activity (e-commerce) can involve the transfer of tangible goods or the transfer of intangible goods via electronic means. In particular, in e-commerce they are divided into two categories:
Direct electronic commerce: electronic “transfer” of virtual goods or services such as websites, files, software, images, texts, training courses, information, access to databases and so on. For VAT purposes, these operations constitute the provision of services;
Indirect electronic commerce: “physical” transfer of material goods through which the contract is concluded and payment is normally made. The goods are shipped using traditional routes. For VAT purposes these supplies qualify as supplies of goods.
Direct e-commerce and non-EU operations
Direct electronic commerce activity concerns the operations that a VAT taxable person established in Italy carries out towards taxable or private entities. When the counterparty is located outside the EU, it is necessary to understand the information to be reported on the invoice.
E-commerce operations directed towards private individuals outside the EU
In the event that an e-commerce company established in Italy provides services to private individuals outside the EU, the operation is considered outside the scope of VAT pursuant to art. 7-septies, lett. i), Presidential Decree no. 633/72.
E-commerce operations directed towards non-EU companies
In the event that an e-commerce company established in Italy provides services to non-EU companies, the operation is considered outside the scope of VAT pursuant to art. 7-ter of Presidential Decree no. 633/72 with the annotation ”operation not subject”.
Summary table: direct e-commerce operations outside the EU VAT application
VAT Profiles OperationB2C – Issue of the invoice by the Italian subject outside the scope of VAT pursuant to art. 7-septies, lett. i), Presidential Decree no. 633/72.B2B – Issue of the invoice by the Italian subject outside the scope of VAT pursuant to art. 7-ter of Presidential Decree no. 633/72 with the annotation ”operation not subject”; – self-invoice by the non-EU subject (if there is such a regulatory provision in the non-EU country).
Direct e-commerce and non-EU operations
Indirect e-commerce operations towards private individuals outside the EU
In the event that an e-commerce established in Italy carries out…
