EU moves to stop Italian bank guarantee requirement for VAT credits

Wed 30th Oct 2013

The European Commission is seeking to prevent Italy demanding a bank guarantee from non-resident companies seeking to apply for a VAT credit via their Italian VAT returns.

EC wants neutrality for non-resident VAT payers in Italy

The EC infringement procedures issued seek to redress the imbalance of non-Italian VAT registered businesses looking to have a refund (credit) on their input VAT via their Italian VAT returns.  Currently, the Italian VAT authorities look for a bank guarantee of up to three years, which must also include incurring interest.

The Commission’s proceedings attack the length of time for the Italian credit repayments, as well as the requirement for a bank guarantee.  Companies may also provide insurance policies.

Italian VAT credit reclaims

Surpluses of input / purchase VAT is claimed in Italy through a quarterly (30 days after the quarter end) or annual claims (along side the annual VAT return.  This is generally due in by the 30 September of the year following).

For VAT credits below €516k, annual claims are made through the normal fiscal bank account of the tax payer.  For amounts above this amount go through the Agenzia delle Entrate tax office.