Italy proof of intra-community supply and nil VAT

Fri 22nd Aug 2014

The Italian VAT office has ruled on elements of the evidence required for companies to use intra-community supply rules and nil-rated VAT.

Intra-community supplies

Under the EU VAT Directive, the ‘export’ sale of goods from one EU member state to another is Nil rated for VAT by the vendor if both parties are EU VAT registered. Such transactions are known as EU Intra-Community supplies, and the purchaser becomes liable for accounting for both the input and output VAT.

Evidence required on Intra-community dispatches

The vendor is responsible for collecting evidence to demonstrate that the goods did indeed leave the country. Typically this requires: checking the customer has a valid EU VAT number on the VIES website; transportation documentation such as CMR (Convention on the Contract for the International Carriage of Goods by Road); sales invoice; bank transfer payment evidence etc.

Italy rules on extra evidence for EC Sale

In the Italian case, the goods were a pleasure boat which was transported under its own sail to France – so no proof of delivery.

The Italian tax office advised that instead, it would require details of the registration of the boat in the French Registry of Ships and written confirmation from the French customer that it took legal title.