Companies established outside the EU that incur expenses in Italy — for a trade fair, the purchase of goods, professional services, or transport — often pay Italian VAT without having any tax obligation in our country. In many cases that tax can be recovered: the tool provided by Italian law is the VAT refund for non-EU companies under art. 38-ter of Presidential Decree 633/1972. Let’s look at who is entitled to it, under what conditions, and how to apply.
Table of contents
What is the VAT refund under art. 38-ter
Art. 38-ter of Presidential Decree 633/1972 extends to taxable persons established in non-EU States the right to obtain a refund of the VAT paid in Italy on purchases and imports of movable goods and services related to their business activity, under the same conditions provided for EU operators. It is the tool designed for those who, despite having no VAT position in Italy, have nonetheless incurred Italian tax on an occasional basis.
Unlike ordinary deduction, it does not require opening an Italian VAT number or periodic filings: it is a procedure designed for occasional purchases, not for those carrying out a continuous economic activity in Italy.
The reciprocity condition: which countries are entitled
The point that most often raises doubts is the reciprocity condition: Italy grants the refund only to companies from those non-EU countries that, in turn, guarantee equivalent treatment to Italian companies that incur value-added tax on their territory. It is therefore not an automatic right for any non-resident company, but depends on the country of establishment.
As of today, reciprocity is recognized with Switzerland, Norway and Israel, historically the only non-EU countries admitted. Since 2024 the United Kingdom has also been added: with Resolution no. 22/E of 2 May 2024 the Italian Revenue Agency formalized, through an exchange of Notes Verbales, a reciprocity agreement with the United Kingdom, retroactive to 1 January 2021 (the date on which the country became fully non-EU). British companies can therefore claim a refund of Italian VAT even for previous years, if they have not already done so.
For companies established in countries other than these four, art. 38-ter cannot be used: the only way to recover Italian VAT remains the appointment of a fiscal representative, with the opening of an Italian VAT position and ordinary deduction in the tax return.
When it can be used (and when it cannot)
The refund under art. 38-ter is reserved for those who, during the reference period, have not carried out transactions territorially relevant for VAT purposes in Italy. The following are exceptions, and do not prevent the refund:
- transactions for which the tax is due by the Italian customer under reverse charge;
- transport services and certain ancillary services;
- specific exempt transactions identified by the law.
If the non-EU company instead carries out regular sales or supplies with VAT relevance in Italy — that is, it conducts a genuine economic activity in the territory, not an occasional purchase — art. 38-ter is not the correct tool: direct identification or a fiscal representative are needed instead (see below). Also watch out for a frequent practical detail in imports: if the customs bills of entry are issued to the VAT number of a fiscal representative rather than to the foreign company itself, the refund under art. 38-ter on those imports is denied.
The procedure: Form IVA 79 and the Pescara Operations Centre
The application is submitted using Form IVA 79 to the Pescara Operations Centre of the Italian Revenue Agency, on paper: for non-EU taxable persons, the electronic procedure reserved for EU operators is not available. The main elements of the procedure:
- Deadline: the application must be submitted by 30 September of the calendar year following the one in which the tax was incurred;
- Minimum threshold: 400 euros for applications relating to a sub-annual period (minimum three months), 50 euros for the annual application;
- Documents required: the original invoices proving the VAT paid and a certificate, issued by the tax authority of the country of establishment, attesting the applicant company’s status as a VAT taxable person (the certificate is valid for one year and can be reused for multiple applications within the same period);
- Response times: the Revenue Agency processes the refund within 6 months of the request, extended to 8 months if it requires additional documentation; after these deadlines, interest is due.
One exception concerns e-commerce: businesses that join the special OSS or IOSS schemes for distance sales are entitled to a refund of Italian VAT even without having to prove reciprocity of their own country, thanks to an amendment introduced by Legislative Decree 83/2021 implementing the EU e-commerce reform.
VAT refund under art. 38-ter, direct identification, or fiscal representative: which to choose
These are three distinct tools, designed for different situations:
- the refund under art. 38-ter is the simplest solution for those who have incurred occasional expenses in Italy (a trade fair, an event, an isolated purchase) and do not carry out any continuous activity here, provided their country has reciprocity with Italy;
- direct identification (art. 35-ter of Presidential Decree 633/72) allows a company to obtain its own Italian VAT position, without intermediaries, but is reserved for EU operators and for non-EU operators from countries with which mutual administrative assistance arrangements exist — a requirement distinct from refund reciprocity, to be checked case by case;
- the fiscal representative (art. 17, paragraph 3, Presidential Decree 633/72) remains the only route for companies from countries without reciprocity and for those carrying out regular active transactions in Italy: it involves opening an Italian VAT number and ordinary deduction in the tax return, with periodic filing obligations.
The practical difference is between an occasional recovery without an Italian VAT position (art. 38-ter) and a continuous tax presence in Italy (direct identification or fiscal representative): the choice depends on the frequency and nature of the transactions, and should be assessed case by case. For a broader overview of the Italian VAT system, rates and compliance obligations, see our guide VAT in Italy.
Frequently Asked Questions
Which non-EU countries are entitled to an Italian VAT refund?
As of today: Switzerland, Norway, Israel and, since 2024, the United Kingdom (retroactive to 2021). No other non-EU country currently meets the reciprocity condition.
By when must the refund application under art. 38-ter be submitted?
By 30 September of the year following the one in which the VAT was incurred, submitting Form IVA 79 to the Pescara Operations Centre of the Italian Revenue Agency.
What happens if my country does not have reciprocity with Italy?
The refund under art. 38-ter cannot be used. Italian VAT can still be recovered by opening a tax position in Italy through a fiscal representative, deducting the tax in the annual tax return.
Key questions about the VAT refund under art. 38-ter at a glance
Which non-EU companies can claim an Italian VAT refund?
Only companies established in non-EU countries that guarantee reciprocity to Italian businesses. The refund is therefore not an automatic right for any non-resident company: it depends on the country of establishment.
When is the VAT refund under art. 38-ter not the right tool?
When the non-EU company carries out regular sales or supplies relevant for VAT purposes in Italy, that is, a genuine economic activity rather than occasional purchases. In that case direct identification or a fiscal representative is needed instead.
Do reverse-charge transactions prevent the VAT refund?
No. Transactions for which the tax is due by the Italian customer under reverse charge, transport and certain ancillary services, and specific exempt transactions identified by the law are exceptions and do not prevent the refund.
Free Initial Assessment
Has your company paid VAT in Italy?
Describe your situation below: we’ll tell you right away whether you qualify for a refund under art. 38-ter, or which tool best fits your case. If you already have invoices or other useful documents, you can simply send them by replying to our confirmation email, or by writing to info@studiosavia.com.
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