918 itAly
As for the documentary evidence to prove the movement of goods from one Member State to
another one, the Italian tax authorities issued some guidance stating that the national practice
issued before 1 January 2020 continues to be valid, but to benefit from the presumption, the tax
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able persons should be in possession of a set of documents according to the EU Regulation.
Effective use and enjoyment.
To avoid instances of non-taxation or double taxation, EU Member
States can apply use and enjoyment rules that allow a service that is “used and enjoyed” in the
EU to be taxed or prevent a service that is “used and enjoyed” outside the EU from being taxed.
If a service is taxed in the EU under the use and enjoyment provisions, a non-EU supplier of the
service may be required to register for VAT in every Member State where it has customers that
are not taxable persons.
For the information regarding the rules relating to VAT registration, see
the chapters on the respective countries of the EU
.
In Italy, the following services are subject to the “use and enjoyment” provisions:
• The supply of short-term leasing, including financial leasing, rental and similar services, of
means of transport when these are made available to the customer in Italy, and they are used
within the European Union territory or when they are made available outside the EU but used
within Italy.
• The supply of leasing, including financial leasing, rental and similar services, not on a short-
term basis, of means of transport other than pleasure boats, when the customer is a nontaxable
person resident in Italy, provided they are used within the EU, or when the customer is non-EU,
provided they are used within Italy.
• The supply of leasing, including financial leasing, rental and similar services, not on a short-
term basis, of pleasure boats, provided that the boat is actually made available in the territory
of the State, the service is rendered by taxable persons established therein and the boat is used
within the European Union territory.
• The supply of leasing, including financial leasing, rental and similar services, not on a short-
term basis, of pleasure boats when the boat is made available in a country outside the EU, the
supplier is established in the same country and the boat is used in Italy.
• The supply of leasing, including financial leasing, rental and similar services, not on a short-
term basis, of pleasure boats when the supplier is established in a country different from the
one where the boat is put at disposal of the customer, when the customer is a nontaxable person
resident in Italy, provided they are used within the EU, or when the customer is non-EU, pro
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vided they are used within Italy.
According to the Budget Law for 2021, the effective use inside the Italian territory of pleasure
boats should be attested by a declaration to be filed with the Italian tax authorities, and the pro
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tocol number indicated in the receipt should be indicated in the invoice for that provision of
service. This rule is applicable with effect from 14 August 2021.
Transfer of a going concern.
Normally the sale of the assets of a VAT-registered or VAT-registrable
business will be subject to VAT at the appropriate rate. However, a transfer of a business as a
going concern (TOGC) may be outside the scope of the tax under certain conditions. A TOGC is
the sale of a business or part of a business capable of separate operation including assets. Where
the sale meets the conditions, the supply is treated as outside the scope of VAT. In Italy, the VAT
law does not provide for a definition of a TOGC, therefore, reference must be made to the Civil
Code, to the principles set forth in the EU Court of Justice and Italian case law and to the guid
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ance provided by Italian tax authorities. In particular, to qualify as a TOGC, the assets transferred
must constitute an autonomous organization sufficient to allow the exercise of a business activ
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ity, although it is not necessary that all elements belonging to the supplier are transferred or that
they should be integrated by supplementary resources of the purchaser.
Whilst the TOGC is outside the scope for VAT purposes in Italy, the transaction is still subject to
registration tax for which the applicable rate depends on each type of asset transferred and can
vary from 0.5% to 9%.