A VAT warehouse is a physical site, located within Italy in which goods are stored temporarily and may benefit from a number of VAT concessions.
Article 50-bis of Italian Legislative Decree no. 331/93 governs the methods and requirements for using VAT warehouses.
This article has recently been amended by Italian Legislative Decree no. 193/2016, within the scope of the 2017 Budget Law.
The purpose of VAT warehouses is to defer the payment of VAT since the tax may (not always) be paid when the goods leave the warehouse rather than when they arrive. Both domestic and EU goods can be stored in VAT warehouses.
Non-EU goods can only be left in a VAT warehouse after they enter free circulation and excise duty has been paid.
The greatest and most obvious advantage for companies using this type of facility is the financial benefit of deferring payment of due tax. Consequently, businesses are able to reduce (if necessary) use of the credit market, in turn reducing potentially burdensome fees.

Operations not liable for VAT

The main feature of VAT warehouses is that all operations relating to goods stored or handled in them are not liable for VAT.
The tax becomes payable only when the goods are removed from the warehouse.
When goods are placed in a VAT warehouse, the following types of operation can be performed without VAT being applied:

1. purchases within the EU: in these cases, the party liable for the tax pays the purchase invoice without applying VAT, in accordance with Article 50-bis.
   
2. goods from non-EU origins entering free circulation. As mentioned above, goods originating from non-EU locations can be stored in VAT warehouses only once they have entered free circulation. When such goods are imported, Article 50-bis of Italian Legislative Decree no. 331/93 will be cited on the import certificate to show that the goods are being stored in a VAT warehouse, meaning they are liable for excise duty but not for VAT.
    
3. EU transfers: these operations are “atypical” EU transfers, as the goods do not leave Italy but are transferred to an EU party via the warehouse. The Italian transferor must invoice these operations, citing Article 50-bis of Italian Legislative Decree 331/93.

When the goods leave the VAT warehouse, the temporary arrangement is terminated, and VAT will then be payable. The taxable status of goods depends on their final destination. If the goods are intended for use or sale within Italy, the party purchasing them collects them from the VAT warehouse and is then liable for paying the VAT applicable to the operation. VAT is charged for this operation via a self-billed invoice in accordance with Paragraph 2 of Article 17 of Italian Presidential Decree no. 633/72. This invoice must be registered in both the invoices issued and purchase ledgers. Conversely, for goods to be sent to another EU country the transferor, as a general rule, will issue the invoice without applying VAT, under the combined provisions of articles 41 and 50-bis of Italian Legislative Decree no. 31/97. Lastly, if the goods are to be sent to a non-EU country, the transferor will issue a VAT-exempt invoice, under the combined provisions of Paragraph 4, Letter g) of Article 50-bis of Italian Legislative Decree no. 331, and Article 8 of Italian Legislative Decree no. 633/1972.

Subjects authorised to remove goods from VAT warehouses

Operators wishing to withdraw goods from VAT warehouses can issue an invoice without adding tax if they meet the reliability requirements specified in Paragraph 1 of Article 2 of the Italian Ministerial Decree of 23 February 2017.
If they do not meet the requirements, they must submit a guarantee using the methods specified in the provisions of 28 March 2017.
Subjects withdrawing goods from VAT warehouses are deemed reliable in any case if they have been issued with an AEO certificate or are covered by the provisions of Article 90 of Italian Presidential Decree no. 43/1973 (central government, public bodies and companies with known solvency). Those withdrawing goods from the VAT warehouse are also deemed reliable if associated with those who entered the goods for free circulation by storing them in the VAT warehouse.

Storing goods in a VAT warehouse

As stated above, transfers and services rendered for goods stored in a VAT warehouse may be undertaken without incurring VAT.
When goods stored in a VAT warehouse are transferred, the operation in itself does not incur VAT.
Note that this applies regardless of whether the transferor or transferee is Italian, an EU member or a non-EU member.
Services for goods stored are not liable for VAT in accordance with Paragraph 4, Letter h) of Article 50-bis of Italian Legislative Decree no. 331/1993 because the services then become the taxable base of the operation when the goods are removed from the VAT warehouse.

Transfer of goods between VAT warehouses

These types of operation, governed by Paragraph 4, Letter i) of Article 50-bis of Italian Legislative Decree no. 331/93, are not liable for VAT as the goods are not leaving the VAT warehouse but just moving from one VAT warehouse to another.