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Italy Permits VAT Payments on Cash Receipt Basis

Italy introduces VAT Cash Accounting Scheme allowing VAT payment on cash (receipt) basis with effect from 1 December 2012. It is mandatory for the taxable person to indicate in invoices, if the cash accounting scheme has been applied.

Jan. 15, 2013 - PRLog -- Under this scheme, VAT is deductible/chargeable only when the payment for goods or services has been made/received. Further, the VAT becomes chargeable even if the payment is not made after one year of supply of goods or services provided. However, this condition is not applicable if the supplier files for bankruptcy within the year.

Taxable persons can opt for the cash accounting system on taxable transactions, only if their annual turnover doesn’t exceed EUR 2 million in the preceding year.

·         Supplies that are exempted from the scheme are:

·         Supplies made for non professional or non business activities;

·         Supplies made under certain specific schemes;

·         Supplies covered under the reverse charge mechanism and

·         Supplies of pharmaceutical products and certain goods and services which are made to shareholders, associates or participants and to public bodies and institutions.

Few acquisitions subject to the reverse charge mechanism; intra-community acquisitions of goods and imports are also excluded from the scheme.

VAT overpayment under this scheme can be set off against other taxes, subject to terms and conditions applicable for such set off. For offsets higher than €15,000, the VAT credit is required to be certified by an Italian CPA or auditor. This provision to offset does not apply anywhere else in Europe, and is applicable only in Italy.

For more information on this topic email media@nair-co.com

Get the latest press releases and updates on international tax, HR, Finance, compliance and other legal news at Nair & Co. Industry Alerts (http://www.nair-co.com/newsandannoucement.aspx).

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Source:Nair & Co.
Location:United States
Tags:International Expansion, Portugal New, Data Reporting, Obligations, PR

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