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A quick guide for Expo Milano 2015 exhibitors on taxation

by Enrico Bronzo

The Italian tax agency has released a guide, translated into English and French, to help exhibitors at the upcoming Expo Milano 2015 World’s fair understand how to take advantage of tax incentives as well as the ins and outs of taxation during their stay in Italy. The main points are listed below. For more information, click on the PDF marked “tax issues” or “questions fiscales” at the link: http://www.agenziaentrate.gov.it/wps/content/nsilib/nsi/documentazione/desk+dedicato+e+desk+expo+2015/desk+dedicato+expo+2015+indice

Direct taxes for unofficial participants
Non-commercial activities carried out by “unofficial participants” (companies and organizations not officially invited by the Italian government) at their exhibition space are exempt from all direct taxation (IRES, corporate tax, personal income tax, IRAP, and related supplements).

However, commercial activities of “unofficial participants” (which cannot take up more than 20% of their exhibition space) will not benefit from the exemption.

Activities such as the sale of products and gadgets, restaurant services and entertainment shows will be subject to regular taxation.

Business by an “unofficial participant” (as well as business conducted by “official participant,” or an organization invited by the Italian government) “does not enjoy any tax benefit for the purposes of direct taxes, IRAP, VAT and other indirect taxes, under the agreement with the BIE (Bureau of International Expositions).”

The provision of services related to a trade fair (including Expo 2015) follow different tax regulation criteria depending on the legal status of the participating entity and the place where this entity is established:
1. if the entity is not taxable under VAT (a B2C organization), services carried out as part of the trade fair “shall be deemed as made in Italy, provided they are physically carried out therein” (Article 7-d, paragraph 1, lett. a) of Presidential Decree n. 633/1972). This condition thus applies to services carried out as part of the Expo 2015.
2. if the entity is subject to VAT tax (a B2B organization), services provided as part of the trade fair are deemed to be performed in Italy. Italian entities will need to produce VAT invoices for the services. If services are provided to taxable entities established in Italy they are therefore subject to VAT (entities domiciled in Italy or entities domiciled or resident abroad but permanently established in Italy, in line with Article 7, paragraph 2, letter d, Presidential Decree no. 633/1972) .

Otherwise, if the entity is taxable but not established in Italy (B2B), services provided as part of the trade fair are not be subject to VAT, in line with Article 7-bis, paragraph 1, letter a, dpr n. 633/1972. These entities are nonetheless required to produce an invoice (as of Article 21, paragraph 6-bis of Presidential Decree n. 633/1972), which must be marked as “reverse charge” for EU entities or “transaction not subject to VAT” for extra-EU entities.

Registration tax, IMU, TASI, TARI
Real estate entities owned by the General Commissariat section of the “official participants” and of “unofficial participants” are exempt from IMU (primary residency tax) (Article 10, paragraph 2, of the Agreement with BIE). These entities “are not bound by any obligation to file for tax records.”

Exemptions related to IMU also apply to TASI (in line with note the Department of Finance July 17, 2014, prot. 21571).