Following the Government crisis, on 1st October 2013 the VAT rate will rise from 21% to 22%.
This increase is the result of the deadline not being extended according to art. 40, par. 1-ter D.L. 98 of the 6th July 2013 (the previous deadline was brought forward to 1st October 2013 pursuant to art. 11 D.L. 76/2013).
The 4% and 10% rates remain unchanged.
In order to comply with the new rate, it is important to be aware of when a transaction is carried out for VAT purposes pursuant to art. 6 DPR 633/72 (VAT law).
Sale of estates
Where applicable, the new 22% rate must be applied on the deed that will be signed from the 1st October 2013 before a public notary. Any sum paid in advance or invoice already issued is subject to 21% rate.
Sale of goods
The new rate must be applied to the deliveries carried out from the 1st October 2013. The 21% rate is applicable for any advance payments or any invoices issued up to and including 30th September. In the event of invoices issued by the 15th October 2013 with regard to goods delivered in September, the 21% VAT rate is still applicable. This is because, pursuant to Italian VAT law, these invoices must be considered in the balance of VAT due for September, even if issued in October.
From a VAT perspective, services are provided when the price is paid or when the invoice is issued. Services that will be paid or invoiced starting from 1st October 2013 will be subject to 22% VAT rate.
Services pursuant to art.7-ter DPR 633/72 (VAT law)
Services provided by an EU or non-EU taxable person to an Italian taxable person are considered for VAT purposes provided in Italy when the service has been completed (before or after 1st October 2013) . In this case, the Italian taxable person will have to apply the reverse charge with the VAT rate applicable at that moment (21% or 22%).
When a credit note is issued, the VAT rate will have to be the same as the rate applied to the cancelled transaction.
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