02 March 2017

There are many platforms such as Amazon which facilitate the selling of goods overseas. Most of those countries have taxation requirements which the seller must adhere to.

UK based companies therefore, must consider the legal and tax implications of making sales outside the UK.

A key area of consideration is VAT. It is the responsibility of the seller to ensure that they inform the overseas country of their activity and that they abide by the laws applicable to each country in relation to taxation.

For example:

Distance selling to Italy

A VAT-registered business in an EU State, which does not have a fixed establishment in Italy, but which sells goods to customers in Italy who are not themselves registered for IVA, is involved in ‘distance selling’. The most common example of distance selling would be a UK business selling to Italian consumers by mail order.

As soon as the value (excluding VAT) of these sales to customers in Italy (excluding sales to VAT-registered customers) in a calendar year goes over a threshold, which is currently €35,000, the business must register for Italian VAT. It then becomes an IVA-registered business for the purpose of all future distance sales to customers in Italy, which means charging Italian IVA on sales, and regularly filing IVA returns and paying IVA to the Italian tax authorities.

Distance selling does not apply to sales of new means of transport, goods installed or assembled by the supplier, or to the sales of second-hand goods where VAT has been charged on the margin.

If a business makes any distance sales of excise goods (generally, alcohol, tobacco and fuel) to customers in Italy, it must register for IVA regardless of the value involved (the €35,000 threshold does not apply).

Importing into Italy, but not making any sales subject to IVA

A business or organisation in Italy that imports goods into Italy from VAT-registered suppliers in other EU States, but which does not sell any goods or services which are within the scope of IVA, must register for IVA and then account for IVA on all such imports once the value of those imports exceeds €10,000 in a calendar year. This would be unusual, but would include for example a business that imported goods to Italy but whose only sales were exempt from IVA.

How to register

If a business concludes that it does have to register for IVA, then it should appoint an Italian-based business accountant (a ‘commercialists’) to confirm the situation and handle the process.

Alternatively, a business with no permanent business establishment in Italy may register directly using form ANR/3, which is available in English together with guidance notes.

If you need any guidance please contact us and we will direct you towards the appropriate resource.

However, you should be aware that our agreements with any of our clients doesn’t include any contractual provision for us to provide professional advice in relation to any overseas taxation.