Non-residents and VAT-relevant transactions in Italy: direct identification or fiscal representative?

Are you a non-resident operator wishing to carry out VAT-relevant transactions in Italy? You may need to appoint a fiscal representative or register for VAT purposes in this country, i.e. obtain an Italian VAT number.


When is it mandatory? 

The appointment of a fiscal representative or the opening of a so-called direct VAT identification (identificazione diretta ai fini IVA) allows non-resident companies/operators carrying out activities subject to VAT in Italy and not having a permanent establishment in the country to exercise their rights and fulfil their obligations in accordance with national VAT legislation.

Such appointment of a fiscal representative or such opening of a direct VAT identification is compulsory when (i) the foreign company/operator carries out VAT-liable transactions in this country and the relevant obligations are to be borne by the latter, (ii) the transaction is carried out vis-à-vis persons not required to apply the reverse charge mechanism (inversione contabile), or (iii) when the aforementioned appointment or opening is imposed by specific rules on intra-Community trade. 

Relevant examples are:

  • sales of goods to private individuals in Italy (e.g. at trade fairs or local street markets);
  • sales of goods located in Italian warehouses to foreign subjects (e.g. sale of a machine located in Italy to another foreign company);
  • supply of territorially relevant real estate services to private individuals in Italy (e.g. painting work at a private residence);
  • exceeding the sales value of Euro 10,000 for e-commerce activity (when this amount is exceeded, it is necessary to register in Italy);
  • introduction of goods into special VAT “warehouses” (art. 50-bis DPR 633/72);
  • distance sales of goods subject to excise duty in Italy; 
  • specific cases of triangular or quadrangular transactions.


Appointment of a fiscal representative and subsequent fulfilments

Pursuant to art. 17 of Presidential Decree 633/1972, non-residents must fulfil their obligations and exercise their rights through the appointment of a fiscal representative resident in Italy.

The fiscal representative, who may be either a natural person or a legal entity, must be appointed by the non-resident company/operator by means of a public deed, a registered private deed or a letter filed in a special register kept at the competent Revenue Office. 

The appointment of the fiscal representative must take place before the date on which the first territorially relevant transaction is carried out and must be communicated to the other contracting party before the transaction is actually performed. 

The representative shall open a VAT position on behalf of the principal/customer  (in this case, the foreign non-resident subject). Upon such opening, the foreign entity, through its duly appointed representative, will be subject to all obligations and rights under national VAT law.

By way of example, it is necessary to submit a Declaration of Commencement of Activity (AA7 or AA9 Model), apply for a VAT number and submit the annual VAT declaration. This VAT number must be indicated on all invoices.


The procedure for direct VAT identification and subsequent fulfilment

If the foreign entity/operator is resident in a European Union Member State or based in a non-EU country with which mutual assistance agreements on indirect taxation are currently in force, direct VAT identification may be used, as introduced into Italian law by art. 35-ter of Presidential Decree 633/1972, in implementation of EU Directive No. 2000/65/EC.

Before carrying out any territorially relevant transaction in Italy, the following documents must be submitted for direct identification requests:

  • the ANR/3 Model;
  • the certificate of VAT liability in the Member State of establishment, in its original version, along with its translation into Italian accompanied by the translator's signature and identity document;
  • the certificate issued by the Chamber of Commerce of the Member State of establishment, in its original version, along with its translation meeting the same requirements as above;
  • a self-declaration pursuant to art. 47 of Presidential Decree 445/2000;
  • a copy of the signatory's valid identity document.

The declaration for direct VAT identification, resulting in the attribution of a VAT number in Italy, must be submitted to the competent Revenue Agency (Pescara Operational Centre - via Rio Sparto n. 21 - 65100 Pescara) in the following manner: 

  • directly to the office; 
  • by postal service, by registered mail with acknowledgement of receipt.

The Revenue Agency shall proceed to the assignment of a VAT number to the applicant, which must then be indicated in all declarations and acts relevant for tax purposes.

External offsetting with credits relating to other taxes and duties is not permitted and the identified non-resident foreign operator may exercise its right to deduct tax and is entitled to claim a reimbursement of the excess credit.


Periodic Obligations

Opening a VAT identification number in Italy entails various obligations and formalities, including:

  • accounting management for VAT purposes;
  • preparation of periodic VAT settlements and related reporting;
  • payment of any VAT liability (monthly or quarterly);
  • drafting of the annual VAT declaration.

In addition to these fulfilments, it should be considered that the obligation to issue invoices electronically has been recently introduced in Italy, and although foreign companies applying for VAT registration or appointing a fiscal representative are exempt from this obligation, they are nevertheless indirectly impacted by the same.


Fiscal representative, direct VAT identification and/or permanent establishment

These are three alternative positions. Therefore, the non-resident entity with a permanent establishment in Italy cannot also operate through a fiscal representative or direct VAT identification.

For the purposes of direct taxation, a permanent establishment refers to a permanent place of business through which an enterprise resident in one country carries on its activity, in whole or in part, in another country. Three requirements must be met, (i) the existence of a place of business, (ii) the spatial and temporal permanency of the latter and (iii) the conduct of the business activity in Italy in and by means of said fixed base. For VAT purposes, the presence of human and material resources is also necessary.

Particular attention must be paid, as the non-resident foreign entity can only avail itself of the simplifications provided by the system for fiscal representations and direct VAT identifications if does not already have a permanent establishment in the country.


These are but a few points to take into consideration. Should you be planning to carry out VAT-relevant transactions in Italy, it is important to familiarise yourself with the specific requirements and regulations.


Are you interested in learning more about the figure of the fiscal representative or the direct identification for VAT purposes in Italy? Contact us, we will be happy to provide our support.

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