Tax Update – 11.10.2013 VAT On Goods’ Warehousing

1. INTRODUCTION

With a recent ruling the European Court of Justice has stated that goods' warehousing services can be included in those pertaining buildings when a specified portion of the of the warehouse is allocated to the exclusive use of the purchaser. The interpretation of the European judges, in line with the proposal of modification of the Rule 282/2011/EU, is clearly in contrast with the position assumed by the Italian Tax Agency so far.

2. VAT TERRITORIALITY ON SERVICES CONNECTED TO BUILDINGS

The European Directive 2008/8/EC, so called "Directive on services", has modified, with effects from January 1st 2010, the place where services become taxable for VAT. The Legislative Decree 18/2010 has enforced in the domestic law the modifications brought by the directive, redefining the territoriality's rules formerly included in the article 7 of the Republic Presidential Decree 633/1972 and in the article 40 of the Law Decree 331/1993.

VAT territorially for buildings is now ruled by article 7-bis, paragraph 1 of the RPD 633/1972. While services connected to buildings are ruled by article 7-quater, paragraph 1, letter a) of the same Decree.

Article 7-quater, paragraph 1, letter a) has not modified the criterion of connection of those services with the territory of the State, therefore starting from January 1st 2010 services on buildings are considered as performed in the State where the building is placed, in line with article 47 of the Directive 2006/112/EC that kinks the taxation of the service to the place where the building is situated.

Receiving the "Directive on services" the Italian legislator has widened the number of services connected to the place of the building, including services related to buildings, such as surveys, agency services, housing in the hospitality industry, camping or royalties on the use of buildings and preparation and coordination of works in the view of building sites.

Under the former discipline the qualification of a good as mobile or building did not assume a particular relevance for the aim of identifying the place where services were taxable or not, since criteria to identify this place was substantially the same (place of performance of the service and place of the building).

Under the new rules, instead, the distinction between movable or unmovable goods has assumed a fundamental importance, since the territoriality criterion of taxation of services is strictly connected to the nature of the considered good.

Services related to unmovable goods (buildings), rendered to VAT subjects, are considered as performed in the State of the EU or Extra-EU, where the purchaser is established, while, services connected to buildings continue to be...