The European Commission proposed on Tuesday 31 March to authorise Italy to continue to apply a tax derogation allowing it to grant an exemption from VAT to taxable persons with an annual turnover not exceeding €65,000, until 31 December 2024.
In its proposal for a Council implementing decision, the Commission explains that Italy has benefited from this measure derogating from the VAT Directive since 2007. "This request was motivated by Italy's economic structure, which is largely made up of micro-enterprises with a very small number of employees, as well as by Italy's desire to simplify VAT obligations for small businesses and to make it easier for the national tax authorities to collect the tax", the statement reads.
Extended several times, the derogation was due to expire on 31 December 2019. The Commission recognises that a further extension of the measure could have beneficial effects in reducing the administrative burden for almost 1,332,000 small businesses and for the Italian tax administration.
The measure will also remain optional for taxable persons who have the option of opting for the normal VAT system. The budgetary impact as regards VAT receipts for 2019 is estimated by Italy at EUR 385.7 million, which is considered negligible, she says.
See proposal for a decision: https://bit.ly/2QZXtY8 (Original version in French by Marion Fontana)