Novità dallo studio

Clarifications on VAT deduction procedure

  • DEADLINE FOR THE EXERCISE OF THE VAT DEDUCTION

The Legislative Decree no. 50/2017 modified the articles 19, paragraph 1 and 25, paragraph 1 of the Presidential Decree 633/1972, which concern respectively the exercise of the VAT deduction and the invoices registration. 

From the coordinated reading of the two articles abovementioned and the clarifications introduced by the circular no. 1 / E of the Revenue Agency, it is implied that the day from which start to run the terms for the exercise of the VAT deduction coincides with the moment in which the two following conditions verify on the transferee / buyer:

  1. tax collectability pursuant to art. 6, paragraph 5 of the Presidential Decree no. 633/1972 (substantial condition);
  2. receipt of a valid invoice prepared in accordance with the provisions provided by article 21 of the Presidential Decree no. 633/1972 (formal condition).

When both conditions are verified the transferee/buyer, after the invoice registration in accordance with the procedures set forth in article 25, first paragraph, of the Presidential Decree no. 633/1972, can exercise the deduction of the tax referred to purchases of goods and services, or to imports of goods.

  •  CASES AND FULFILLMENTS

The following table shows, in relation to the different cases identified, the related fulfilments and deadlines, indicating in particular:

  • the VAT liquidation into which to operate the deduction;
  • the deadline to deduct VAT;
  • the Reporting of the Data concerning the Invoices (“Spesometro”) in which to include the invoices received.

 

Cases      

VAT liquidation

Deadline to deduct VAT

Spesometro*

Invoice dated 2017 and received in 2017 (registered between 01/01/2018 and 30/04/2018)

It is necessary to create and use a special VAT section related to purchases 2017 ("thirteenth liquidation")

30/04/2018

(deadline of transmission of VAT return referred to FY 2017)

Enter the Invoices in the “Spesometro” referred to year 2017

Invoice dated 2017 and received in 2018 (registered in 2018)

First 2018 VAT liquidation following the invoice registration

30/04/2019

(deadline of transmission of VAT return referred to FY 2018)

Enter the Invoices in the “Spesometro” referred to year 2018

Invoice dated 2017 and received in 2018 (registered between 01/01/2019 and 30/04/ 2019)

It is necessary to create and use a special VAT section related to purchases 2018 ("thirteenth liquidation")

30/04/2019

(deadline of transmission of VAT return referred to FY 2018)

Enter the Invoices in the “Spesometro” referred to year 2018

Invoice dated 2018 and received in 2018 (registered in 2018)

First 2018 VAT liquidation following the invoice registration

30/04/2019

(deadline of transmission of VAT return referred to FY 2018)

Enter the Invoices in the “Spesometro” referred to year 2018

Invoice dated 2018 and received in 2018 (registered within 30/04/2019)

It is necessary to create and use a special VAT section related to purchases 2018 ("thirteenth liquidation")

30/04/2019

(deadline of transmission of VAT return referred to FY 2018)

Enter the Invoices in the “Spesometro” referred to year 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Purchasing invoices in the “Spesometro” may be communicated on the basis of the year in which the right to deduct VAT is exercised that coincides with the year of receipt of the documents. In regard of this point It will be necessary further clarifications by the Revenue Agency.

  • MEANS OF PROOF OF THE DATE OF RECEIPT OF THE INVOICE

The transferee / buyer who has exercised his right to deduct VAT must be able to prove the moment when the purchase invoice was received.

This proof may be provided by alternatively using the following means:

  1.  certified e-mail (PEC) or other systems that demonstrate the time of receipt of the document (such as e-mails, envelopes, receipts ... etc);
  2. a correct bookkeping and therefore the respect of the obligation, stated in Article 25, paragraph 1, of progressive numbering of invoices and customs bills received, in order to allow a prompt control by the Italian Tax Authorities of the correct sequence of the records of the various documents.

In the event that the documents mentioned in point i) are not available, the proof of a correct bookkeeping according to the provisions of point ii) becomes essential. To this end, the company should adopt a standard procedure formalized in writing and related to the receipt and registration of documents.

If the company does not have neither documents of proof nor an efficient standard procedure, in case of tax audits It will be assumed that the date of receipt of the invoice coincides with the date of issue of the same.

Furthermore, It is recalled that it is duty of the transferee / buyer to proceed with the regularization of a purchase invoice not issued within the terms of the law or "irregular".

Therefore, the transferee / buyer who has not received an invoice from his supplier within 4 months from the date of execution of the transaction, is required to submit to the competent office and within the 30th day following the expiry of the terms a self-invoice in duplicate, after payment of the tax due.

The failure to comply with these obligations implies the application of a penalty pursuant to art. 6, paragraph 8 and paragraph 9-bis of Legislative Decree 471/1997.

  •  SPECIAL CASES

Accounting Customs Bill: in this case the purchaser who has to account a customs bill relating to a purchase with VAT payable in December 2017, will have to prove when he actually received the relevant documentation from the customs representative, if during the month of payment (close hypothesis) or at a later time (remote hypothesis). In the last case, it is necessary to have all the documentation proving the "late" delivery by the customs representative of the documents relevant for VAT purposes.

Purchases of intra-community goods and services: in this case the law had already set strict deadlines and in particular:

  • in case of receipt of the invoice, the customer must account the same, after integration, by the 15th day of the month following the month of receipt, but with reference to the previous month;
  • if the customer does not receive the invoice within the second month following the operation, the customer must replace the seller issuing and accounting an invoice by the 15th of the following month, referring to the previous month.

It is considered appropriate to underline that the formal condition for the deduction, therefore, occurs within and not beyond the terms set out above.

  • ACCOUNTING AND RIGHT TO DEDUCTION

In according with the circular of the Revenue Agency, it will be necessary to use a special VAT section if the accounting of a purchase invoice occurred in a tax period subsequent to the one in which the two conditions above (formal and substantial) occur, not later than the deadline for transmitting the VAT return for the year in which the right to deduct arose. This approach will be necessary in order to outline that the VAT, not included in the periodic VAT settlements related to the registration tax period, contributes to determining the balance of the annual VAT return for the year in which the requirements are verified.

  • INTEGRATIVE VAT RETURN AND STATUTE OF THE TAXPAYER

The circular states that the principle of VAT neutrality remains guaranteed by the possibility to present an integrative VAT return, to correct errors or omissions that determined the indication of a higher taxable amount, a higher tax debt or a lower deductible surplus.

This clarification will allow the VAT payer to recover the VAT not previously deducted by presenting the integrative VAT return up to December 31st of the fifth year following the one in which the first VAT return was transmitted.

In according with the principles of the contributor's Statute and given that the clarifications reported by the circular intervene at a date subsequent to the deadline set for the periodic payment of VAT related to December 2017, the different behavior from the indications provided by the circular of the Revenue Agency - adopted by VAT payers during this periodic liquidation - will not be punishable.