Do we need to register for and charge Italian VAT?

Selling interior design services and furniture B2C for property in Italy. UK business and client.

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We are a UK VAT-registered company providing interior architectural/design services and supplying fixtures/furniture/soft furnishings to a UK consumer (not business) for their holiday home in Italy. The goods may be shipped directly from our suppliers from the UK to Italy, shipped from Italy to Italy, from elsewhere in the EC to Italy and from outside the EC to Italy. I assume that they will be stored in Italy until the property is ready.

My understanding is that our services are outside the scope of UK VAT as they are land-related, but that we will have to register for and charge Italian VAT. I'm confused about the goods, though. If they're not in the UK at any point, presumably they're outside of the scope of UK VAT, but what about Italian VAT? EC VAT-registered suppliers will not charge us VAT as we're a VAT-registered business in the UK (I guess that will change from 1 January), but do we have to charge Italian VAT? If so, at what point?

How do I find someone to help with this, please? We're a small business and it's not something our correspondingly small UK accountants are familiar with!

 

Replies (4)

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By williams lester accountants
21st Oct 2020 12:19

Is your accountant registered with a professional body or have professional indemnity insurance? If so they will most likely have a helpline that they can use to get the answer, though it may be chargeable.

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chips_at_mattersey
By Les Howard
21st Oct 2020 12:19

The 'Place of Supply' is Italy, since your services are 'land-related' services. This triggers a liability to register for VAT in Italy.
The question about supplying goods is more complex. It looks like you will also be liable to Italian VAT, since you become registered for VAT in Italy. The legal reference is s7(5), but depends on the exact arrangements for the delivery of the goods from the UK to Italy.

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By Moonbeam
21st Oct 2020 12:32

There are specialist companies who will register you for VAT in the country concerned and take your bookkeeping data for that country and prepare a VAT return for you. Google and you will see the options.
It is NOT cheap. But given the complexities, even if you were fluent in their language, I wouldn't advise doing it yourself.
Something your fees to your client will have to reflect.

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VAT
By Jason Croke
21st Oct 2020 13:15

An EU VAT registration is somewhere between €500-€950 and then the ongoing returns are around €250-€350 per quarter, depending upon the number of transactions.

There are UK specialist firms that can do this, but when quoting make sure the quote includes all costs, specifically apostilling and notarising documents, which many EU member states require and it can cost around £60-£80 per document to apostile or notarize and you'll need several documents for a VAT number such as passport, incorporation certificate, proof of address, etc..

In theory, this may be a one-off project so the costs would likely be the VAT registration and then one or possibly two returns before deregistering - or maintaining the registration if you think there may be future sales here.

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