The wave of electronic invoicing has arrived for Italy, with B2B transactions commencing in 2019.
As EY’s Global Tax Alert details, companies should begin to assess procedures for normal accounts payable/receivable transactions, etc.
This is the wave of the future, so ERP systems should be reviewed (or external vendors sought) to perform this function timely.
The Italian Budget has enacted a 3% web tax, and a new PE definition based on economic, vs. physical, presence.
The Tax is due by the buyers of the above services unless the supplier declares in the invoice that it has not reached the threshold of 3,000 transactions in the calendar year.
The PE definition goes beyond the OECD’s intent, and will certainly lead to additional disputes in Italy and other countries developing such a subjective measure that also attracts double taxation.
EY’s global tax alert provides additional details as reference.