ORDINARY VAT RATE INCREASING FROM 20% TO 21%
Under the change made to article 16, 1st paragraph of the Republic Presidential Decree no. 633/72, the ordinary VAT rate will increase from 20% to 21%, while the extraordinary rates (applicable just to certain goods and services, f.i. food or accommodation) - 4% and 10% will remain unchanged.
The correct VAT rate to be applied must be identified according to the moment when the operation/sale can be considered as "preformed" under the VAT general law, different for goods and services. In general:
Movable goods' sales are performed when shipped or delivered; Unmovable goods' (as real estate properties or buildings) sales are performed when the Notary deed is signed; Movable and unmovable goods' sales with constituent effects delayed in respect of shipping, delivering or signature, are performed at the date of effectiveness; Services' sales are performed when the price is paid, despite of their partial or total execution. Therefore:
Sales performed before the Law Decree effective date will remain subject to the old 20% rate; Sales performed starting from the effective date (publication of the new Law in the Official Gazette) will be subject to the new 21% rate. DEFERRED INVOICING FOR GOODS' SALE
In case of invoicing deferred to the 15th day of the month following goods' shipment or delivery, allowed for goods accompanied by the transportation document, the taxable event will be, in any case, the shipment or the delivery.
The old 20% VAT rate will be applicable in case of shipments or deliveries preceding the effective date; The new 21% VAT rate will become applicable in case of shipments or deliveries made starting from the effective date. TAXABLE EVENT'S ANTICIPATION
A waiver to the general discipline is made to sales of goods and services every time the invoice is issued or the price is partially or totally paid before those events which determine the taxable moment, or independently from them the operation is considered as performed at the invoice's or payment's date.
As a consequence:
Payments on account made or received before the new Law effective date are subject to a 20% VAT rate, while the final/remaining payment, made starting from the effective date, will be subject to 21% VAT rate; The old 20% rate will be applied to invoices issued before goods' shipment or delivery if those documents are issued before the effective date. CREDIT AND DEBT MEMOS
Credit and debt memos issued after the ordinary VAT rate's increasing must be subject to the old 20% rate if the original invoice, that to be amended with the memo, has been issued before the new law enforcement.
Retailers and all other operators that are not obliged to issue invoices, have to put in place a new column in their sales' VAT registers to separate sales subject to 20% from those ones subject to 21% VAT rate.
PRO-FORMA/NOTICE INVOICES ISSUED BY PROFESSIONALS
Pro-forma/Notice invoices issued by self-employers and professional before the enforcement date, have to amend those invoices with the new 21% VAT rate if their payment will be received after the new rule's enforcement date.
SALES TO PUBLIC AUTHORITIES
Sales of goods and services to the Italian State/Government and all other Public Authorities, listed in article 6, paragraph 5 of the Republic Presidential Decree no. 633/72 (such as Regions, Provinces, Municipalities, Universities, Chamber of Commerce, etc.) are subject to VAT payment at their payment's date.
Considering that, for these particular sales, invoice has to be issued in any case at operation's performance (good's delivery), VAT applicable rate will remain 20% if the invoice has been issued and posted/registered in the seller's VAT registers before the new Law enforcement date.
The invoice will be subject to 21% VAT rate if it will be issued on or after the above mentioned date. The rule, therefore, introduces a limitation for 20% rate application: the invoice must be posted/registered in seller's VAT registers, being not sufficient its issuing before the enforcement date.