Country-specific updates: Italy

Italian Supreme Court, Judgement no. 11023 of 27 April 2021

A sale made under a sale and leaseback agreement does not constitute a supply of goods for VAT purposes as it should be considered as a whole single transaction having financing purpose every time (i) it does not result in the physical transfer of the tangible asset entailing the purchaser-supplier to act as the owner of the asset itself, (ii) it only satisfies the company's real cash-flow needs and, as such, (iii) it has no tax avoidance purpose.

DLA Piper comment: According to the ECJ’s case law principle (see ECJ, 27 March 2019, Mydibel SA v Belgian State, C-201/18), once the above mentioned requirements have been verified, the sale and leaseback does not constitute a VAT supply of goods followed by a supply service (lease service). Italian Supreme Court and European Court seems aligned while new official position on this matter of the Italian Tax Authority. The latter in the past affirmed that the sale and leaseback transaction should be split into a supply of goods and a provision of services both taxable for VAT purposes (see Italian Tax Authority, Circular Letter no. 218/2000).

Italian Customs and Monopolies Agency, Circular Letter of 28 April 2021

The European Commission Decision (EU) no. 2021/660 of 19 April 2021 has amended the Decision (EU) no. 2020/491 by extending the time limit for the benefit of the exemption from import duties and VAT on import of goods needed to fight the COVID-19 pandemic emergency.

DLA Piper comment: As part of the measures adopted by the European Commission to face with the COVID-19 epidemic crisis, the recent Decision (EU) no. 2021/660 extended the temporal validity of this exemption regime until 31 December 2021. In order to benefit from this scheme reference has to be made to the Italian Customs and Monopolies Agency, Circular Letter no. 19/2020.

Italian Customs and Monopolies Authority, Circular Letter of 7 May 2021

The Italian Customs and Monopolies Agency is in the process of updating its import customs clearance information system in order to comply with the new regulations set out in the “VAT e-commerce package” (which will enter into force on 1 July 2021) and to gradually implement the institutes provided for in the EU Customs Code.

DLA Piper comment: According to the European Commission, each Member State must update its national import systems and special import regimes within December 31, 2022. The Italian Customs and Monopolies Authority is already implementing a new information system for which, in a nutshell, each operator will have to register through their SPID credentials (level 2) and through the import service platform, accessible only in S2S mode, each operator will be able to submit a customs declaration as well as request its revision or its cancellation.

Italian Tax Authority, Ruling no. 340 of 13 May 2021

The starting date from which each creditor may legitimately issue a VAT credit note is the date of approval of the debt restructuring agreements entered pursuant to art. 182-bis of the Bankruptcy Law. However, differently from the other bankruptcy procedure, once received and recorded the credit note, the debtor is required also to repay the relevant VAT (in order to cancel totally or partially the deduction of the original input VAT).

DLA Piper comment: Debt restructuring agreements differ from ordinary insolvency procedures, also from a VAT perspective. In particular, given the starting date for the issuance of the VAT variation note, such procedure should take place (and, therefore, the variation note should be issued) within the final term provided for by Article 19, c. 1, Presidential Decree 633/72 (i.e. within the date of submission of the VAT return, see also Italian Tax Authority, Circular Letter no. 1/2018). Moreover, since the debt restructuring agreements do not affect the remaining creditors who are not parties to the procedure, the debtor is required to register the variation note and to repay the relevant tax without waiting for the final fulfilment of the agreements.