Italy misses EU 2015 digital services VAT implementation deadline

Sat 3rd Jan 2015

Italy failed to complete by 1 January 2015 the final hurdle for the implementation of the new 2015 EU-wide VAT rules on sales of electronic, broadcast and telecoms services to consumers.

The Italian government had agreed on the proposed decree, but the necessary Parliamentary Committee has not yet reviewed it. Once this is done, the decree is published in the Official Gazette, which then gives it legal enforcement.

This means that Italian companies still have to charge Italian VAT at 22% on sales of such services to consumers in other EU countries. The other 27 EU member states have fully ratified their legislation, and now require resident digital service providers to track their EU customers’ locations and charge the VAT rates of the appropriate countries. Filings may then be made through a single portal, MOSS Mini One-Stop-Shop, and a single payment made to cover all EU countries.

The 2015 changes were agreed by all member states in 2008, with the Implementing regulation, updating the EU VAT Directive, being passed in October 2013.  All member states were then required to introduce amending local legislation prior to the 1 January 2015.

In its 2015 Budget, Italy proposed raising its VAT rate from 22% to 26% in 2016.  This is to help it comply with the Euro currency pact rules.