03 Aug 2018 TAX FREE SHOPPING: e-invoicing will be mandatory from 1st September 2018
From 1st September 2018, the obligation of electronic invoicing will come into force for assignees of consumer goods whose counterpart is a non-resident traveller in one of the European Community countries. This obligation concerns purchases whose amounts exceed € 155.00.
What is tax-free shopping and what does the law say?
This is a facility for all those who do not live in the European Community, through which it is possible to request the VAT refund for goods purchased in Italy.
The Legge di Bilancio 2018 and the Law 225/2016 regulate the facilitation according to which from 1st September electronic invoicing for tax-free shopping will be compulsory for the purpose of dematerializing the customs visa. Based on these regulations, the Customs Agency and the Italian Tax and Fiscal Agency (Agenzia delle Entrate) have published two documents to explain how to implement the new obligation:
- Determinazione n. 54088/RU within which there are the rules for implementing the electronic invoicing
- Nota n. 54505/RU which explains the Otello 2.0 software’s functionalities
How does VAT relief work?
The assignor of the goods must issue the electronic invoice in XML format and transmit the invoce data through the Otello 2.0 system; the transferee will receive a copy of the invoice attesting the successful acquisition of the goods. To demonstrate the exit of the goods from the European Community, the digital visa code generated by the Otello 2.0 system will replace the stamp that is currently affixed to the tax document by the customs.
What are the requirements to claim VAT refund?
- Consumer goods must be purchased by a private citizen
- The cost of the goods must exceed € 155.00
- The goods must be for personal or family use
- The property must be carry outside the European Community within three months of purchase
- A regular invoice must be issued following the purchase of the goods
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