Foreign VAT number, how to open it and work in Italy

Is it possible to open a VAT number abroad and work in Italy? This is certainly a choice that could fascinate many, given that there are many countries in which taxation is lower than in Italy.
To operate in Italy with a foreign VAT number, however, you must follow a series of precautions to avoid incurring risks and sanctions and above all to be in compliance.
We remind you that the principle of freedom of establishment applies in the countries of the Union: an individual resident in the EU can start his business activity in the country most suitable for him.
You can also make this choice with the aim of obtaining lower taxation or simply reducing bureaucratic requirements, but it is essential that you also transfer your personal tax residence.
For non-EU countries it is necessary to check the requirements required in the individual country.
Simply put: it is not forbidden to move the business abroad to save on taxes and we have seen some real escapes in recent years.
The main problem for those who move abroad is that it is not always possible (or in many cases not desired) to close their business in Italy.
Operating in Italy with a foreign VAT number is possible, just as it is possible for an Italian to easily open a VAT number abroad.
Everything, however, must be done following the correct procedures and not with the intention of evading Italian taxes.
Having made this necessary premise, let's see how to open a VAT number abroad while continuing to operate in Italy, legally and without running any risk.
read also Opening a VAT number: how is it done and how much does it cost? Foreign VAT number, how to open it to work in Italy Foreign VAT number, residency is essential Opening a VAT number abroad Foreign VAT number, can you work in Italy? Foreign VAT number, work in Italy and residence in Italy: the risks Foreign companies working in Italy How is the headquarters of a business/company established? Control of VAT numbers Foreign VAT number, residence is essential To open a foreign VAT number, safely, without incurring crimes, it is necessary to transfer your residence to the country in which you wish to open your VAT number.
We immediately disappoint, therefore, those who think of opening a VAT number in another country while remaining, however, living in Italy.
In this case, esterovestimento occurs, i.e.
the false residence in a foreign country of a natural person or a company to avoid the tax obligations required in one's country of residence (in our case, Italy).
Although for many it may seem attractive to establish residence abroad to take advantage of privileged taxation, it is necessary that the residence is actually abroad and that the conditions for being considered fiscally resident in Italian territory are not met.
It becomes essential to know all the rules, fiscal and otherwise, of the country you choose and also check the presence of any contributions recognized to those who invest.
Only in this way can it be understood whether there is a real tax advantage.
read also Foreign dressing, what is it and what crimes can it be? Opening a VAT number abroad In every country of the European Union it is possible to open a VAT number since the principle of freedom of establishment applies, i.e.
the possibility of every person residing in the EU to start his business in any country he deems appropriate .
If you choose a non-EU country, however, you need to find out what requirements it requires to start a business.
Despite this, in any case, opening is simple both inside and outside the EU.
If the intent is to reduce taxation, you can choose, for example, a country with more favorable taxation (an example could be Moldova or Bulgaria).
If the objective, however, is to have a less complex bureaucracy, the United Kingdom should be chosen as it requires less bureaucracy than Italy.
The fundamental thing, all things considered, is not to limit yourself to opening your business in the foreign country, but you must also commit to transferring your tax residence there.
read also Tax residency 2024, new criteria from 1 January Foreign VAT number Can you work in Italy? With the foreign VAT number the entrepreneur can also work in Italy (in our country there is no prohibition on operating with a foreign VAT number, in fact).
The problem with operating in Italy with this VAT number is that of being required to pay taxes both in Italy and abroad.
We remember, in fact, that Irpef is payable by: those who work and live in Italy; lives in Italy and works abroad; lives abroad and works in Italy.
Naturally, those who pay Irpef in Italy must also carry out all the formalities, for example they must submit the tax return within the established deadlines.
Those who make use of the flat-rate regime in Italy must, however, renounce it if they decide to open their VAT number abroad and establish their tax residence there.
Double taxation, in any case, can be avoided if you choose a country that has a bilateral convention against double taxation as your country of residence.
But even in this case the foreign professional who works in Italy is required to pay a withholding tax of 30%.
If it is specified in the agreement signed with the foreign state, the professional or entrepreneur is required to pay taxes in Italy only if he has a fixed base here such as an office.
In this case the 30% withholding tax is to be applied to income produced in Italy and the professional will have to document it.
Only if the professional operates in Italy occasionally, then taxes are due only in the country of residence.
Foreign VAT number, work in Italy and residence in Italy: the risks The situation becomes particularly risky for the professional who, despite living in Italy, operates in our country with a foreign VAT number given that he or she incurs tax inversion or hidden permanent establishment.
The main problem is to be found in determining the tax headquarters of a company which refers to the place where the subject concludes contracts and where the company's administrative activity is carried out.
In these cases the risk is that of incurring tax evasion which inevitably leads to an assessment notice for the payment of evaded taxes increased by penalties ranging from 120% to 240% of the unpaid taxes.
read also Missed tax return or VAT, when do you risk prison? Foreign companies that work in Italy The rules are naturally reciprocal, so those who move abroad and also operate in Italy must pay taxes here too, but the principle also applies to foreign companies that also operate in Italy, they will have to pay to the Italian tax authorities the taxes relating to income produced in Italy.
How is the headquarters of a business/company established? At this point it becomes important to define the criteria with which the location of an activity is established.
In this case, the OECD (Organization for Economic Cooperation and Development) rules help, to be coordinated with internal rules: in order to determine the tax headquarters of a company, the place where a person has the power to conclude contracts and the place where it carries out administrative tasks.
It follows that if a company is based abroad, but carries out administrative activities in Italy because, for example, the corporate bodies carry out their activities here, it may be subjected to an investigation for tax evasion in the context of foreign investment.
or stable occult organization.
Naturally, the consequences also depend on the corporate form assumed, for example joint stock companies are liable only with corporate assets, professionals and entrepreneurs are also liable with personal assets.
It follows that from an economic point of view there is a lot of risk.
Checking VAT numbers We remind you that through Vies, a system made available by the Revenue Agency, it is possible to check community VAT numbers.
VIES (VAT Information Exchange System) is a search engine (not a database) owned by the European Commission.
When you start a search, information is retrieved from national VAT databases.
The system offers a series of data on VAT numbers, for example it confirms the validity of the VAT code, indicates whether the same is also active for intra-EU operations or if the VAT number does not exist.