SUPPLIES OF GOODS AND SERVICES BETWEEN THE UNITED KINGDOM AND THE MEMBER STATES
Supplies of goods from a EU Member State to the United Kingdom will continue to be exempt from VAT but under a different title. In fact, if at present those supplies qualify as intra-Community, once the withdrawal has been completed they shall be considered as exports.
In the same way, purchases in Italy of goods from the United Kingdom should no longer be treated as intra-Community acquisitions, but as imports, with consequent payment of VAT on importation at customs.
This last aspect must be duly taken into account by the economic operators who, no longer paying the tax on the purchase through the reverse-charge mechanism (which provides for the registration of VAT on the intra-Community acquisition both on debit and credit, thus leading to a zeroing of the tax burden), will have to bear, as a rule, a new exit (or rather, advance) of cash.
With reference to services, the territoriality rules on services rendered by an operator residing in a EU country to a British customer will not undergo significant changes; it should be noted, however, that the relevant invoice shall have to contain the wording “transaction not subject” (and no longer “reverse charge”).
On the other hand, the VAT on services rendered by a supplier established in the United Kingdom to a customer established in Italy will be paid by the latter, through the mechanism of self-billing and no longer through that of the invoicing integration (which is provided for purchases of generic services rendered by a supplier established in a EU State).
DIRECT IDENTIFICATION VS. APPOINTMENT OF THE FISCAL REPRESENTATIVE
Pursuant to VAT Law, taxable persons not resident and not having a permanent organisation in Italy, who intend to carry out operations on Italian territory that give rise to the need to fulfil their obligations and exercise their VAT rights, may obtain an Italian VAT number by means of the simplified instrument of direct identification.
Persons residing in a member state of the European Union or in a third country with which there are legal instruments governing mutual assistance in the field of indirect taxation may use direct identification.
Currently, the above mentioned instruments of mutual assistance have been activated with the Member States of the European Union only; as a consequence, taxable persons a non-EU State cannot access the direct identification mechanism, being instead required to appoint a tax representative in Italy. This modality, involving the joint responsibility of the representative with the represented party, is usually more onerous than direct identification.
Consequently, if no legal instruments of mutual assistance in indirect taxation matters were negotiated with the United Kingdom (which has become a non-EU State),persons resident in the United Kingdom would be required to appoint a tax representative in Italy, as they could no longer use the direct identification mechanism.