INTRODUCTION TO MILAN EXPO 2015

MILAN EXPO 2015

The Italian Tax Agency illustrates in the Circular no.27/e of 7th August 2014 special tax benefits for participants at Expo 2015.

The first chapters deal with the compliance of exhibitors not residing in Italy. In particular, the Agency has a Desk appointed for the event (Expo2015@agenziaentrate.it), a section of the website (www.agenziaentrate.gov.it/wps/content/nsilib/nsi/documentazione/desk+dedicato+e+desk+expo+2015), and a contact point at "Service Centre for Participants" at Milan Expo 2015.

The agreement between the Italian Government and the Bureau International des Expositions (BIE) of the 11th July 2012, contains several tax benefits, and since it is established by International Law, it acts as waiver to internal rules.

The circular makes a distinction between Official and Non-Official Partners. The formers include States and International Organizations who received and accepted the official invitation from Italy to take part in Milan Expo 2015; while the latters are juridical entities authorised to take part in the event, such as public local administrations, enterprises and civil society organizations.

Both Official and Non-Official Participants are exempt from any direct taxation (regarding Ires, Irpef, Irap and related surcharge) in the limits of their non-commercial activities. Commercial activities, indeed, are not exempted. Business income is taxable in Italy, only if the activity is accomplished through a permanent establishment (art. 23, sub-par.1, lett.f of the Consolidating Act). An establishment, though, is permanent also in case the fixed place of business is used for a short time, if the related activity is performed in the sole State taken into consideration. In this case, the activity is short-term due to its intrinsic characteristics. Therefore, the commercial activities performed in the Expo premises shall be considered performed by permanent establishments.

There is a distinction between a permanent establishment for direct taxation purposes and for VAT purposes. Indeed, in the first case, the personnel requirements are not necessary, if they are not essential to the kind of activity performed in the business place. For VAT purposes, instead, the permanent establishment assumes the employment of human and material resources, not being enough the sole presence of equipment and facilities on the territory of a sole State.

Besides, according to art.11 of EU Regulations 282/2011, the attribution of a VAT number is not a sufficient proof of the existence in Italy of a branch of a not resident subject.

Under article 16 of the Agreement with the BIE, Non-Official Participant buildings are also exempt from the Imu Property Tax and the Tasi (a tax on municipality services). Non-Official Participants benefit of the exemption from registration fee, stamp duty, mortgage and cadastral tax only in relation to deeds related to buildings used for Expo. There are benefits from Tax on the income of Official Participants Staff, if the staff has not the Italian residence or is not resident in Italy. The exemption is referred also to the staff of Non-Official Participants, if they work for a foreign public territory administration.