Italy: The Proof Of Exportation

1. INTRODUCTION

The proof of the exportation is given by the message "exit result" that the Custom Office sends to the exporter to be registered in the data base of the Customs Informative System. However, with a recent decision, the Supreme Court has deemed that missing the typical proof, the exit of goods from the territory of the European Union can be easily proved by the commercial and custom documentation recalled by the tax laws.

2. THE PROOF OF GOODS EXIT FROM THE EU TERRITORY

The benefit of VAT exemption foreseen for exportation, is subordinated to the proof of the actual exit of the goods from the territory of the EU; missing this, the Tax Administration claims the tax not charged and related administrative fines.

With the enforcement, starting from July 1st 2007 (phase 1) and subsequently, from July 1st 2009 (phase 2) of the new Custom Export Control System (ECS), the paper copy nr. 3 of the Administrative Custom Declaration (in Italian "Documento Amministrativo Unico" or "DAU") has been substituted by the Exportation Complement Document (in Italian "Documento Accompagnatorio all'Esportazione" or "DAE"), that includes the MRN (movement reference number) code.

Before this change, the exportation was verified by the Customs exclusively with the submission of the DAU. The Custom Office to which the Declaration was submitted, stamped the same to release goods; the first copy of the DAU was stored by the Customs, the second copy was sent to the Statistic Authority of the Member State of exportation, the third one was returned to the exporter.

Now the DAE is released by the Custom of exportation to the delegated courier, or directly to the exporter and convoys the goods until the Customs Office of exit from the EU.

It is therefore no more needed that the Custom Office of exit to place the so called "exit visa" because the same has been replaced by the electronic message "exit results". The regular exit of the goods can also be ascertained by the same exporter on the institutional website of the Custom Authority typing the MRN code related to the exchange.

If under exceptional or unpredictable events the exit Custom is not able to close the exportation started with the ECS System, on the backside of the DAE it stamps the exit visa (that, under these circumstances, is an accepted proof of the exportation both for Custom and Tax Laws).

3. THE 3^RD COPY OF THE CUSTOM DECLARATION

With the Circular Message nr. 75/D/2002, the Customs Agency has established the procedure applicable to prove the exit of goods out of the EU territory in case of loss or missed delivery to the exporter of the 3rd copy of the Custom Declaration (DAU).

Instructions given take in account objective difficulties connected to the return of the said copy, stamped with Custom's exit visa, most of all in case of "indirect" exportations (transport of goods made by the foreign purchaser or on his behalf, triangular exchanges and groupage exchanges).

In order to obtain the 3rd copy of the DAU stamped with the exit visa, the exporter or the declaring subject has to submit a consistent documentation the is checked and evaluated by the Custom Office for the existence of the proof of exportation.

4. THE DOCUMENTATION RECALLED BY THE CIRCULAR MESSAGE 75/D/2002

• Commercial invoice or equivalent fiscal document;
• Bank documents stating the payment abroad (not needed in case of free exchanges);
• Declaration of loss or missed delivery of the 3rd copy of the DAU;
• Declaration stating that goods have reached the third country of destination;
• For sea, train and air transports, certified copy of the transportation agreement with destination a third country;
• For mail delivery, certified copy of the mail receipts.

In case the above documentation is not deemed exhaustive, the Custom Offices can require to the operators additional documents.

5. THE ADDITIONAL DOCUMENTATION RECALLED BY THE CIRCULAR MESSAGE NR. 75/D/2002

• CMR, including the statement of the courier or his agent of delivery of the goods at destination;
• Statement of exit of the goods released by an Italian Custom Office, on the base of double checks made on their registers (if goods left the EU through an Italian Custom);
• Certificates of importation of the goods released by a foreign Authority, statements of arrival released by other Customs or other Public Authorities of the foreign country of destination of the goods (in case goods left the EU through a non Italian Custom);
• Any other commercial or fiscal document including the terms of the shipment the arrival of the goods at destination (credit letter, insurance certificate, check certificate, health certification, etc.).

6. THE DOCUMENTATION RECALLED BY THE TAX LAW

Under the present laws, the proof of the exportation is given by the message "exit results" that the Custom Office transmits to the exportation custom and that is registered in the AIDA database.

The tax law, however, explicitly recommends the means of proof that are deemed valid to state the exit of goods from the EU territory.

In example, article 8, paragraph 1, letter a) of the Republic Presidential Decree 633/1972 (VAT Law), points out the documents suitable to prove the exit of the goods from the EU in case of "direct" (transportation or shipment of the goods by the seller) exportation.

7. PROOFS RECALLED BY ARTICLE 8 OF THE RPD 633/1972

- Appropriate Custom document;

- Validation by the Custom office stamped on a copy of the invoice;

- Validation by the Custom Office on a copy of the transportation document.

With relation to the so called "improper" exportations (transport or shipment by the purchaser within 90 days from the goods' delivery), the article 8, paragraph 1, letter b) of the RPD 633/1972, identifies the proof of the exit of goods from the EU territory with the validation stamped by the Custom Office on the sale invoice.

Customs, instead, state that the proof of "indirect" exportation is made by the DAE addressed to the Italian seller. It is in fact this last one that has to appear as the exporter and, therefore, as the issuer of the export declaration when the purchaser is an Extra-EU operator.

In case of triangular exportations, the proof for the exit of the goods from the EU territory has to be delivered by the first seller or by the promoter of the triangulation, both VAT payers in Italy.

In case of triangulations two domestic and one foreign operators are involved. The first seller sells goods to the second one, who re-sells them to the foreign customer, appointing the first to deliver goods directly to his foreign customer.

While the second seller can certify the exportation with a copy of the DAE, stored together with the print of the notification of export issued by the Custom Office, for the first seller the proof of exportation is made by the "exit visa" stamped by the Custom Office on the invoice issued to the second seller (the promoter of the triangulation), integrated, alternatively, with:

1. The notice both of the exit from the EU territory and the information of the DAE, stamped by the Custom Office following the submission of the exportation document including the "exit visa".
2. Copy of the exportation document stamped by the Custom Office of exit.

8. THE PROOVING DOCUMENTATION FORESEEN BY THE GENERAL CUSTOM LAW

Collecting documents proving the exit of goods can be very difficult in some particular exportations, such as when transport is made by the foreign purchaser or in case of triangular exchanges.

According to the administrative jurisprudence, the proof of exportation for VAT purposes is the same foreseen by the Custom Laws and, consequently, in case the third copy of the DAU is missing, specifically stamped, the proof can be given with documents expressly foreseen by article 346 of the RPD 43/1973 (so called General Custom Law).

9. PROOFS RECALLED BY ARTICLE 346 OF THE GENERAL CUSTOM LAW

• Statements (in particular those certifying the arrival of the goods) and certifications issued by the Custom Offices or other foreign Public Administrations;
• International transport documentation (travel letters, load insurances, load statements on vessels and airplanes, etc.).

According to the Tax Administration, however, the use of those proofs is allowed exclusively in exceptional cases and always if it is demonstrated the objective inability to delivered the stamped Custom document.

Here below we summarise the documents stating the exit of goods from the EU territory, divided according the type of exportation.

10. TYPE OF THE EXPORTATION AND PROOF OF THE EXPORTATION

11. THE DECISION OF THE SUPREME COURT

The Italian Supreme Court has decided in several occasion about the means suitable to prove the actual transfer of goods in a Extra-EU territory, stating that the proof of exportation can result from any document having certainty and incontrovertible characteristics.

With the decision nr. 19750/2013, the Tax Section of the Supreme Court has decided on a claim made to verify the right to benefit from the non-taxability regimen for VAT with relation to purchases of goods re-sold abroad afterwards (triangulation).

In particular the Court has clarified that, missing the typical proof, given by the message "exit results" or by the 3rd copy of the DAU, the proof of exportation can also be give by:

• One of the documents recalled by article 8, paragraph 1, letter a), RPD 633/1972, duly certified by the Custom Office of exit of the goods or, however,
• With elements having the certainty and incontrovertibility characteristics, such as the certifications issued for the scope by the Administration of the Countries of destination of the goods.

The indirect items, in example, such as bank documents stating the payment, are not accepted as proofs.

Moreover, the exportation's proof for VAT is the same foreseen by the Custom Law, when there's no objective chance to deliver the above mentioned documentation stamped, the proof can be given also thorough the means foreseen by article 346 of the RPD 43/1973.

The Supreme Court, therefore, has once again stated that the Custom documentation doesn't constitute the only and exclusive mean of proof of the actual transfer of the goods, having the chance to use also invoices issued to the foreign customer, transportation documents, international transport letters and the other documents foreseen by the tax rules.

To this aim the validation of the Custom Office prooving the exit of the goods from the Custom territory, is needed, or any other document, certain and icontrovertible, as the statement issued by the Administration of the Foreign Country of destination of the goods.

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