Italy: Pre-filled VAT Returns and Settlements

On 13 September 2021, Agenzia delle Entrate (ADE) made pre-filled VAT ledgers available to 2 million Italian residents and established taxpayers who can review and modify data for transactions carried out from 1 July 2021 online. This is an ambitious VAT collection programme. ADE aims to simplify the reporting and procedures of VAT documentation to improve tax compliance. 

The new provisions are implemented by the so-called “Support Decree” that came into force on 23 March 2021 to postpone the launch of this experimental project to the following dates:

• The preparation of the draft VAT registers and the communications of periodic settlements (LIPE form) has been postponed to now include transactions carried out from 1 July 2021; and
• The draft annual VAT return will be made available to taxpayers for transactions carried out from 1 January 2022, for VAT returns that must be submitted by 2023.

Consequently, simplifications in relation to the maintenance of VAT ledgers, the quarterly submission of VAT calculation and the annual VAT return will apply to transactions carried out as of 1 January 2022. The data collected from information supplied via SDI transmission of e-invoices, cross-border transactions and data collected on fees electronically, will be used by ADE to pre-populate a VAT return. Taxpayers that validate the VAT ledgers on the portal can benefit from the exemption to keep VAT ledgers as these are maintained by ADE through the submission of e-invoices and communication of cross-border transactions.

From 1 January 2023, ADE will also make available the pre-filled Annual VAT declaration in the dedicated taxpayer area of the ADE portal. The pre-filled VAT declarations are available only to resident and established taxpayers that make quarterly VAT payments. Taxpayers in special categories or under the special VAT regime, such as editorial businesses, second-hand dealers, travel agencies etc. are excluded from the pre-filled VAT declaration provisions, as well as non-resident VAT registered businesses. These will still be obliged to complete, submit, and pay their VAT returns under normal rules; if using an agent, the agent must be authorized to use e-invoicing for the purpose of having access to pre-filled VAT settlements for their clients. From 6 November 2021, taxpayers that will validate the pre-filled VAT ledgers, will have also access to the so called LIPE, the quarterly VAT payment form also prepared in draft by ADE. 

Some of the advantages of this new experimental system include:

• Taxpayers validating the online VAT ledgers are exonerated from keeping VAT ledgers as these are memorised by ADE for each relevant quarter;
• There is no need to calculate the periodic VAT payment as this is prepared in draft by ADE starting from the third quarter of 2021; and
• The draft annual declaration will be pre-filled in draft from 1 January 2022 if taxpayers have validated the ledgers for all quarters in the year.

The system allows the download of the draft pre-filled payment forms in XML format. These can be uploaded into the taxpayer’s applications and the data can be cross-checked against the taxpayer’s own data. Increased automation and easier fulfilment of tax obligations are the benefits of the pre-filled VAT form and payment form (current F24 form). This represents a step forward in the simplification of the Italian tax system that positively influences the relationship between taxpayers and tax authorities. There is an increased orientation towards mutual exchange of information and open dialogue to build reciprocal trust as the burden of compliance preparation is shifted to ADE that in turn requires the input of the taxpayer in checking the correctness of the pre-filled declarations.

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