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Tax Pills

Sponsorship services for Italian companies: the Vat treatment

sponsor

With regard to the Vat treatment relating to sponsorship services, rendered to Italian companies, it is believed that in this case, being carried out in the interest of national taxable operators and\or business entities, the operations are territorially relevant for Vat purposes in Italy and must be therefore subject to the ordinary rate in force at the time the transaction has been effectively carried-out. The Italian Revenue Agency has recently clarified this fiscal question answering to the request of a German legal entity through a specific Ruling, or Interpello, no. 35 of 7 February 2020. Succeeding this clarification note, it follows that the obligations relating to the provision of services carried out in the territory of the State by non-resident subjects towards taxable persons established in the State's territory have to be fulfilled by the transferees or clients.

The response on Vat for sponsorship services for Italian companies, legal framework - It should be noted that the two general fiscal criteria applicable to B2B relations are governed either at Community level, by articles 44 and 45 of Directive 2006/112/EC, or at national level by article 7-ter of the Presidential Decree n. 633 of 1972. According to both tax rules, the provision of services is considered carried out in the territory of the State when they are rendered to taxable operators and\or entities established in the State's territory or when they are rendered to customers, who are not taxable, for example because exempted, by taxable subjects established in the State's territory.

The case under fiscal scrutiny - As regards the service for setting up fairs and exhibitions, assimilated, in terms of Vat, to the service consisting in the preparation of a seminar, a meeting, this also includes the provision of services rendered in favour of the subjects organizing the event as well the provision of services that are directly related to the setting up of the exhibition stands. Therefore the rule of territorial relevance in the country of the client is fully applied. On the contrary, where the customer was a Community taxable subject and the service provider was a taxable business entity established in the territory of the State, the assumption of territoriality would not be fulfilled. Particularly, with regard to the Vat treatment relating to sponsorship services, rendered to Italian companies, in this case, being carried out in favour of national taxable subjects, the operations are territorially relevant for Vat purposes in Italy and must be subject to the ordinary rate in force at the time of carrying out the transaction. Furthermore, it is necessary to clarify that the obligations relating to the supply of goods and the provision of services carried out in the territory of the State by non-resident subjects towards taxable business operators established in the territory of the State are to be fulfilled by the transferees or clients.

 

Stefano Latini
 

URL: https://www.fiscooggi.it/tax-pills/articolo/sponsorship-services-for-italian-companies-the-vat-treatment