OTELLO (Online Tax Refund at Exit: Light Lane Optimization) is a simplification initiative implemented by the Customs and Monopoly Agency to the benefit of foreign visitors and enables the digitalization of the procedure to obtain the “customs stamp” on the invoice, in order to be entitled to the direct relief or the subsequent refund of the VAT due on the goods purchased on the Italian national territory by individuals residing or having their domicile outside the EU.
VAT direct relief or VAT refund is granted provided that:
- the value of purchased goods, (for each invoice) exceeds 154,94 euros (VAT included);
- the goods are intended for personal or family use and are carried in the personal luggage;
- the purchase is certified by an invoice containing the description of the goods, the personal data of the traveller, the details of his/her passport or of any equivalent document proving that the traveller is resident or domiciled outside the EU;
- the goods leave the EU territory within three months following the date of issue of the invoice proved by the “endorsement by customs authorities”;
- the invoice thus endorsed is returned to the Italian seller within the four months following the purchase, when the traveller leaves the EU from a Member State other than Italy.
Since 1 September 2018, tax free invoices in Italy must be electronically issued and their validation at the Italian Customs exit points is carried out using OTELLO information system (OTELLO 2.0).
Thus, when purchasing goods, the traveller must show his passport, whose information must be correctly reported in the tax free invoice. OTELLO will generate a request code, that has to be displayed on the tax-free invoice copy given to the traveller.
To this regard it should be noted that the traveller, at the moment of purchase, must make sure that the request code is correctly reported on the copy of the invoice issued by the retailer, proving that the invoice was also sent to OTELLO information system and that all the information displayed in the invoice is correct, especially the passport number or any other equivalent document also proving nationality and residence/domicile.
In order to obtain the customs stamp, the following customs formalities have to be carried out by the traveller. Nevertheless, it should be noted in the premise that VAT refund is never carried out by the customs offices. The refund is made directly by the Italian seller according to the terms agreed with the buyer when the goods were purchased (for example, by credit into a bank account, credit card, cheque, etc.). Alternatively, there are some TAX-FREE companies that can provide only a service on behalf of the Italian sellers (more and more sellers join these companies) assuring a faster VAT refund: in this case, the invoices issued by the Italian sellers have the logo of the TAX-FREE company which supplies the service and this procedure could include the payment of a fee which is directly deducted from the amount of VAT refunded to the traveller.
When the traveller is leaving Italy and has a copy of the tax free invoice and its related request code, where should he go to obtain the digital customs stamp?
- If the traveller purchased the goods at a shop that has no agreement with a tax free company, then he has an invoice with no logo on it. In this case he necessarily has to show up at the Customs Office desk, where, if all the requirements are met, he will obtain the digital stamp.
- If the goods were purchased at a shop that has an agreement with a tax free company, he has an invoice with that company logo on it. In order for him to obtain the digital stamp he must show up at the desk, or kiosk, of that same company. These desks are present in the Milan Malpensa, Rome Fiumicino, Venice and Florence airports.
If the tax free company desk is not present in the exit point, it is necessary to show up at the Customs Office desk.
The traveller must show his passport and ticket. OTELLO retrieves all tax free invoices, verifies that the data sent are complete and correct, performs automated risk analysis and directs the traveller to either the “green channel” or “red channel”.
- In case of red channel, the traveller must necessarily go the Customs office for the physical inspection of the goods.
- On the other hand, if the system doesn’t select any check, then the traveller can obtain his digital stamp immediately.
Both travellers and shop retailers can verify the status of the stamp by visiting the Customs and Monopoly Agency website. In particular, by clicking on the following OTELLO section “Tax free invoice Research”, it is possible to verify through the request code the status of the electronic endorsement.
Please, for more information watch the short video below: