#52026PC0281Italy VAT Split Payment Derogation Extension
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This proposal lets Italy continue using its VAT split payment system for supplies made to public authorities and companies controlled by central or local public bodies. Under this system, suppliers receive the net payment, while the VAT amount is paid separately into a blocked tax authority account. The measure targets VAT fraud and affects businesses selling goods or services to Italian public bodies and publicly controlled companies. These suppliers must keep issuing invoices under the special rules and manage cash flow knowing that VAT is not paid to them directly.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Extends Italy’s authority to apply VAT split payment rules for supplies to public authorities and publicly controlled companies
- Keeps VAT payments separate from supplier payments, with VAT paid into a blocked tax authority account
- Maintains special invoicing and payment treatment as an anti-fraud measure
Obligations
What this law requires
For supplies of goods and services made to Italian public authorities and companies controlled by central or local public authorities, the VAT amount must not be paid to the supplier but must be paid separately into a blocked bank account of the Italian tax authorities under the split payment mechanism.
Suppliers making in-scope supplies to Italian public authorities or publicly controlled companies must accept payment of only the net consideration, excluding VAT, because the VAT is paid separately to the tax authorities under the split payment system.
Italy may continue to derogate from the normal VAT payment and invoicing rules in Articles 206 and 226 of Directive 2006/112/EC for in-scope supplies to public authorities and publicly controlled companies, subject to Council authorisation.