Exchanges of goods between Italy and San Marino

Concerning VAT regulation, peculiarities of the Republic of San Marino, a microstate completely bordering the Italian State and having no customs barriers, required the creation of a proper Regulation that took into account such particular characteristics, which are the same in the Vatican City State.

Ministerial Decree dated 24 December 1993 regulates exchange relationships, particularly sales and purchases, but cannot regulate all existing cases and types of operations. In those cases, general principles under Presidential Decree dated 26 October 1972 no. 633 apply, even though, due to the peculiarities of the Republic of San Marino, it is not always easy to identify the correct procedures and fulfilments.

As it happens in transactions with the EU, also in transactions between Italy and the Republic of San Marino VAT is paid in the country of destination, where goods are transported and used, should the buyer be an entity subject to VAT or a similar entity.

On the contrary, where the buyer is an individual or similar subjects, VAT is paid in the country where the goods are purchased, except only for:

• the purchase of new means of transport, for which VAT is always paid in the country of destination, where they are actually registered;
• the so-called distance selling, for which VAT is paid in the country of destination, when the seller exceeds 27,888.67 Euros turnover in the previous calendar year, or when such limit is exceeded during the current year, or when, below this threshold, the seller opts for taxation in the country of destination.

For further information, contact Mario Spera.