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Italy Applies Reverse Charge VAT On Mobile Phones

by Ulrika Lomas, Tax-News.com, Brussels

27 December 2010


In a circular issued on December 23, the Italian Revenue Agency has confirmed that ‘reverse charge’ value added tax (VAT) will be applied on mobile phones and certain personal computer parts, with effect from April 1, 2011.

Under a ‘reverse charge’, VAT for the specified goods delivered inside Italy by a foreign company is owed by the recipient of the goods and not by the foreign supplier. VAT must not be charged on invoices to the recipient, who has to calculate, report and pay the VAT due (that may be recoverable if the recipient is VAT-registered).

The Revenue Agency confirmed that, in order to better confront the possibilities for fraud and tax evasion in importing the particular technological products, Italy has been authorised by the European Council to operate reverse charge VAT on their importation.

It was emphasised that the personal computer parts referred to are microprocessors and central processing units, before their installation into the computer. Whether handsets with a mobile phone function or personal computer parts, it was further stressed that the reverse charge will only apply to goods supplied in the distribution phase, and not to retail sales.

TAGS: compliance | tax | business | value added tax (VAT) | tax avoidance | law | Italy | regulation | trade

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