EU Directive 2008/9/EU (implemented in Italy by Legislative Decree no. 18/2010) allows VAT registered businesses that incur costs in countries that are members of the European Union (and Switzerland, Norway, Israel and the Principality of Monaco, thanks to reciprocal agreements) to request refund of VAT paid abroad on purchases of products and services.
Most purchases from other EU Member States can be made without the application of VAT in the country of the business providing goods and services but for certain expenditure it is not possible to use the usual reverse charge mechanism and VAT must be paid aboard. Some examples:
- Real Estate services – estate agents, legal fees
- Exhibition services: entrance tickets, passes
- Work done on goods under warranty and replacement parts
- Events organization
- Business travel and subsistence expenses
In 2010, rules were introduced to enable refund of VAT from the EU State in which it was paid (or from the various States) requiring a taxpayer to submit the request for a refund only to the tax authorities in their home state. For Italian VAT registered businesses this means filing through the Italian Tax Agency via the online service (Entratel or Fisconline).
The deadline for submission is 30 September of the calendar year following the year for which the refund is requested – i.e. the VAT on costs incurred in the year to 31 December 2018 must be requested for refund before 30 September 2019.
The supervision and management of applications, before transmission to the State responsible for reimbursement, is carried out by the Tax Agency’s office in Pescara.
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