Recent VAT developments in Italy & Germany


 Italy: Increase in the standard VAT rate from 21% to 22%

As from 1st October 2013, the standard VAT rate in Italy has increased from 21% to 22%.

The new VAT rate of 22% is applicable to transactions for which the tax point occurs as of 1st October 2013. Transactions for which the tax point is situated before 1st October 2013 remain subject to the former VAT rate of 21%. The reduced VAT rates of 4% and 10% remain currently unchanged.

Germany: New Circular Letter regarding the intra-Community entry certificate

Following the amendment of the VAT Ordinance (dated 28 March 2013) with respect to evidence for zero-rated intra-Community supplies of goods, the German Federal Ministry for Finance has now published a Circular letter detailing how said evidence must be provided.

In principle, documentary evidence may consist in any document that can prove that the goods have been received by a recipient in another EU Member State (e.g. a bill of lading, a white carrier certificate, etc.). However, the entry certificate (“Gelangenbestätigung”) will be the most important evidence for zero-rating the intra-Community supplies of goods. In the case where transport is carried out with the suppliers’ own means of transport, the entry certificate will even be the only admissible evidence (apart from some exceptions).

The Circular Letter is to be applied to all intra-Community supplies from Germany carried out as from 1st October 2013. However, for supplies of goods from Germany to other EU Member States made before 1st January 2014, the German tax authorities are not going to make any objections if evidence is provided in line with the provisions that were in force in the past.

Germany: Restriction on wholesale goods simplification on supplies to Germany

As you may know, a simplification rule exists in Germany (and in certain other Member States as well) which allows wholesalers from other Member States to treat their supplies of goods to customers in Germany as deemed intra-EU movements of their own goods followed by a subsequent domestic supply to customers in Germany. Germany has now decided to restrict the application of the simplification rule to cases where the goods, arriving into Germany, are transported by the supplier using his own vehicles (i.e. not via a freight forwarder or any other means).

Unless the above-mentioned condition is fulfilled, as from 1st October 2013 the simplification will no longer apply and the general VAT rules for intra-EU transactions (and related VAT and other compliance obligations, e.g. intrastat returns) must be applied in respect of these types of supplies into Germany. Please note that we believe this restriction can be challenged based on EU law and the reading of the VAT directive.