The Italian Official Journal of 27 November 2017 published Law 20 November 2017, No. 167, on dispositions for the fulfilment of duties deriving from Italy’s membership in the European Union (European Law 2017) which entered into force on 12 December 2017. 

One of the most relevant changes with respect to VAT is the provision of article 8 regarding the introduction of a new regime of restitution of undue VAT, included in the new article 30-ter of Presidential Decree No. 633/1972, as well as the provision of article 7 that recognises the right to compensation for taxpayers who are due to provide guarantees in order to receive t a VAT credit reimbursement.

Both new normative additions are part of the final stage of the infringement procedures towards Italy by the European Commission concerning the EU Pilot 9164/17/TAXU case (sentence Banca Antoniana Popolare Veneta (C-427/10)) and the 2013/4080 case.

The new article 30-ter of Presidential Decree No. 633/1972 provides for the request for restitution of non-due VAT under the penalty of voidance within two years from payment or, if subsequent, from the day in which the premise for the restitution takes place. The law also deals with the case of undue VAT - finally assessed by the Tax Administration - applied to the sale of goods or the supply of services. In such case (in accordance with the new article 30-ter, paragraph 2), the request of reimbursement must be submitted by the seller of goods or the supplier of services within two years from the repayment to the buyer of goods or to the consumer of services.  The restitution of undue VAT is not allowed in case the payment of VAT has taken place “in the context of a tax fraud”. The new law is in addition to the remedies granted to taxpayers to guarantee the respect of the principle of VAT neutrality, as article 60, paragraph 7, Presidential Decree No. 633/1972. The latter provision refers to the case of the erroneous non-application of VAT by the seller of goods or the supplier of services.   Should such infringement be assessed by the Tax Administration on the seller or supplier, further to the payment of the relevant VAT to the Tax Administration, the seller or supplier is entitled to request the repayment of such VAT to the buyer of goods or the consumer of services and the latter is allowed to deduct VAT (further to the relevant repayment to the seller or supplier).

Article 7 of the European Law 2017 provides for the right to a compensation equal to 0.15% of the value of the guarantees due by taxpayers in order to obtain VAT reimbursement under article 38-bis, paragraph 4 of Presidential Decree No. 633/1972. Namely, the 0.15% compensation is calculated on the guaranteed amount, for each year of validity of the guarantee itself and is due only when it is determined that the VAT reimbursement is due.  Such rule will apply to guarantees provided in relation to requests of reimbursement starting from 2018 with reference to annual VAT credit starting from 2017 and with reference to quarterly VAT credit from the first quarter of 2018.