Import-export Manual – International commercial transactions and tradeshows
3. INTERNATIONAL COMMERCIAL TRANSACTIONS
COUNTRY OF DESTINATION / COUNTRY OF ORIGIN OF GOODS
Italian businesses must consider two different cases:
• goods shipped to / shipped from EU Countries;
• goods shipped to / shipped from non-EU Countries.
GOODS SHIPPED TO / SHIPPED FROM EU COUNTRIES
Since 1 January 1993, a temporary procedure has been in force which provides for:
• the abolition of customs formalities in the exchange of goods among the member countries of the European Union;
• VIES (VAT Information Exchange System) and INTRASTAT systems to control the transactions;
• the principle of taxation in the Country of destination of the goods;
• the principle of origin applied to transactions with private consumers.
Registration with VIES database
Italian businesses wishing to carry out intra-community transactions (intra-community supply of goods or intra-community acquisitions of goods or services) must check that their VAT identification number (numero identificativo Iva) is registered with the VIES database, by accessing the website of the Italian Revenue Agency (Agenzia delle Entrate).
INTRASTAT obligations
The changes introduced by the Directives 2008/8/EC and 2008/117/EC and by the Italian legislation implementing these directives (Legislative Decree 18/2010) and by secondary legislation, concern the obligation to submit recapitulative statements (also for the provision of services carried out within the EU), for which, with respect to territoriality, the principle of the country of the purchaser applies.
Intra-community Supplies
The sale of goods to companies that have their offices within the EU, with the goods being shipped to another EU country, is defined as intra-community supply. Intra-community supplies must satisfy the following conditions:
• both the seller and the purchaser must be registered for VAT in their respective countries;
• the sale must be upon payment;
• the goods must be transported to another EU State;
Intra-community Acquisitions
The purchase of goods from companies that have their offices within the European Union, with the goods being shipped from another EU country, is defined as an intra-community acquisition. Intra-community acquisitions must satisfy the following conditions:
• purchase upon payment;
• transportation/shipment of the goods to Italy from another EU Country;
• the transaction is between two taxable entities/persons;
PARTECIPATION IN TRADESHOWS IN EU COUNTRIES
If an Italian business participates in a tradeshow or in a trade event, these may be one of two types:
• events after which the goods return to Italy;
• events with on-site sale;
In the case of tradeshows and trade events in which the goods are only on display, with the goods returning to Italy, the Italian business shall note the sent goods on the relevant loading/unloading register in accordance with Art. 50 paragraph 5 of the Italian Decree Law 331/1993.
In the case of products which are subject to excise duties (e.g. wine/ alcoholic beverages), the Italian business must also complete the formalities required for excise duties purposes. When returning the products subject to excise duties to Italy, these must be sent to an authorised tax warehouse in the foreign country, which will then ship the products to an authorised warehouse in Italy.
In the case of tradeshows or trade events with on-site sale, the following procedure applies:
- the sale of goods implies an obligation to register for VAT.
- the Italian business must issue an invoice for the products sold during the trade event. Such invoice must be without VAT or additional costs and it must be issued from the Italian business to the country of destination (in accordance with Art. 42 paragraph 2 sub-paragraph c of the Decree Law 331/1993 this is a non-VAT transaction);
- In the country where the tradeshow is held, if the sale is to final consumers, you must apply the VAT of that country if the sale is to taxable entities/persons, you must apply the VAT of that country or issue an invoice without VAT if the law of that country provides for the internal reverse charge mechanism.
Provision of services within the EU
For services subject to the general rule of the Country of the Purchaser, in the EU, the INTRASTAT requirements and tax formalities depend on the type of service.
GOODS SHIPPED TO FROM NON- EU COUNTRIES
Commercial transactions with non-EU Countries are divided between imports and exports. They require the fulfilment of customs formalities i.e. the declarations for export/import.
• In case of exported goods: when goods are exiting Italy, the declaration must be submitted by the Italian company, whereas when goods are entering the country of destination, the declaration must be submitted by the foreign purchaser.
• In case of imported goods: when goods are exiting the foreign country, the declaration must be submitted by the foreign supplier, whereas when the goods are entering Italy the declaration must be submitted by the Italian company.
In the EU, declarations are submitted electronically using the Single Administrative Document (SAD).
The customs office of export issues the Export Accompanying Document with the indication of the Movement Reference Number (MRN) to accompany the goods for export. Customs formalities must be fulfilled when sending or receiving goods (either upon payment or free of charge) when the consumer is an individual and when the consumer is a business.
Supply for Export
The sale of goods to companies outside the EU, with the goods being shipped outside the EU, is defined as supply for export. The operating procedure is as follows:
• the Italian business issues an invoice to the foreign customer without charging VAT (non-taxable transaction in accordance with Art. 8, paragraph 1, sub-paragraph a, of the Italian Presidential Decree 633/1972);
• the goods are declared for final export, the value is that stated on the sales invoice;
• the Italian exporting company records the invoice in the general accounts and in the VAT book (invoices issued section) ;
• the Italian company must keep a copy of all documentation as evidence of exportation (i.e. the goods have exited the customs territory of the EU).
Importation
The purchase of goods from companies that have their offices in the EU, with goods arriving from a non-EU country, is defined as an importation. Below is the operating procedure:
• goods are declared for final importation on the basis of the value of the purchase invoice and duty and VAT are paid;
• the Italian business records the foreign invoice in the general accounts and the bill of import (part 8 of the SAD) in the VAT book (purchases section) considering the VAT and counts as a credit to the tax authorities (except for non-deductible VAT).
SUMMARY
In the case of imports from non-EU countries, Italian businesses must:
• fulfil all importation formalities at the Italian customs and pay VAT on the value of the imported goods;
• recover the VAT when recording the bill of import in the VAT book for purchases (Input VAT, except for non-deductible VAT).
In the case of intra-community acquisitions of goods, the Italian businesses:
• do not have to fulfil any customs formality nor pay VAT;
• must fulfil the accounting formalities and submit the list of intra-community acquisitions.
In case of exports to non-EU countries, Italian businesses must fulfil export formalities at the Italian customs.
In the case of intra-community supplies, instead, Italian businesses must fulfil the accounting formalities and submit the list of intra-community supplies.
PARTICIPATION IN TRADESHOWS IN NON-EU COUNTRIES
If an Italian business participates in a tradeshow or a trade event in non-EU countries these may be one of two types:
• events after which the goods return to Italy;
• events with on-site sale.
In the first case, if the foreign country has signed the convention, the ATA Carnet procedure applies to the products shipped to the non-EU country. If this is not possible, use the temporary export procedure (from Italy) and the temporary import procedure (in the country of destination). The procedures will be completed once the goods have returned to Italy. In the second case, i.e. the participation in tradeshows and trade events with on-site sale, the following procedure applies:
- Italian law provides for the goods to be exported with a final export procedure (since the Carnet ATA procedure is not applicable);
- in the country of destination, depending on the law of the country, there may be obligations for the seller (the Italian business) (e.g. payment of customs duties, VAT and/or other local taxes etc.).
TRANSACTIONS WITH COUNTRIES ON THE BLACK LIST/OFF THE WHITE LIST
In accordance with the Italian Ministerial Decrees of 4 May 1999 and of 21 November 2001 of the Italian Ministry of Economy and of Finance, since 1 July 2010, it has been mandatory to report all purchases and sales of goods and services carried out with businesses from the countries on the black list or that are not on the white list.
THE AUTHORIZED ECONOMIC OPERATOR (AEO) STATUS AND SIMPLIFICATIONS WHEN DEALING WITH OTHER COUNTRIES.
The Regulations EC 648/2005 and EC 1875/2006, which have been in force since 1 January 2008 in all 27 Member States of the European Union have modified the Community Customs Code and the Implementing Provisions of the Community Customs Code concerning the issuing of AEO certificates to the applicants The economic operators involved in the international logistics chain are manufacturers, exporters, freight forwarders, warehouse-keepers, customs agents, carriers, and importers which are involved in an activity subject to customs regulations.
The AEO status is granted once the Customs Authority of the country (for Italy it is the “Agenzia delle Dogane”) has carried out an audit that certifies compliance with customs regulations and with accounting requirements; the audit also certifies financial solvency.
Becoming an AEO is an individual free choice which depends upon the operating conditions of each applicant. The AEO status grants direct and indirect benefits and advantages for all transactions involving the customs. The direct advantages include faster processing of procedures at borders, a reduced number of checks on goods and documentation, priority processing of shipments.
HI-TECH DUAL-USE PRODUCTS
Dual-use products are normally used for civil and peaceful purposes. However, due to their technical/manufacturing characteristics, they may be used for military and/or terrorist purposes. Agreements and decisions taken within international organisations such as the UN and the EU have led to the enactment of regulations that ban or subject the exportation of such goods towards certain countries to stringent controls.