Effect On VAT, Pensions And Gaming of Italy's Approval Of Inter-EU Law

by Ulrika Lomas, Tax-News.com, Brussels

24 July 2009

The final approval of the latest “Community Law” fulfils certain of Italy’s obligations deriving from its membership of the European Community. Within it are important changes to regulations concerning VAT, private pensions and on-line gaming.

From 1 January 2010, there is to be a reduction to 11% in the withholding tax rate on dividends distributed from Italy to pension funds in other EU countries. That rate of withholding tax was previously 27%; the same as for all dividends from Italy, except for those from savings shares at 12.5%. Non-residents, who can certify payment of the previous withholding tax on pension fund distributions in the current fiscal year, will be able to receive a reimbursement of up to four-ninths of the withholding tax paid, or down to a minimum rate of 12%.

The VAT changes also come into operation on 1 January 2010. They refer, for example, to the residence of transactions through foreign intermediaries. Generally, if the receiver of the goods is an Italian resident, the act of intermediation is to be considered effective in Italy. Where transactions are liable to be subject to a “normal value” control, this is now to be utilised as an evidential, rather than as an automatic, verification of value.

There will be action also in identifying the evidence required in order to reimburse VAT to non-residents on transactions that could benefit from such repayment, including those subject to excise duties (e.g. fuel).

There are to be a maximum of 200 new concessions for online gaming, at a one-off levy of EUR350,000 per concession. Heavier penalties, of up to EUR180,000, will be imposed on those who organise illegal gaming online.

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