VAT incorrectly paid in Italy in the case of distance sales of goods taxable in another EU country may be refunded

With respect to distance sales of goods for which the OSS regime was not used whereas the relevant threshold was exceeded, VAT must be repaid in the country of destination of the goods.

In such instance, in Ruling No. 299 of 19 April 2023, the Italian Tax Authority clarified that the taxpayer may claim a refund of the VAT erroneously paid in Italy through the specific process available under Article 30-ter of the Italian VAT Decree (Italian so-called rimborso anomalo).

According to that provision, and to avoid double taxation issues, the amount of VAT paid in Italy may be reclaimed from the Italian Tax Authority within two years, without the need to submit any guarantee. However, the amount of VAT refunded cannot exceed the amount of VAT paid in the country of destination.

Key takeaway

According to that refund process, Italian taxpayers may want to explore the possibility to recover VAT incorrectly accounted for in Italy and avoid double taxation issues where the tax is due in the country of destination.