The VAT due on supplies of goods and services to the following entities has to be paid by the recipient to a separate and blocked bank account of the tax administration:
- public authorities,
- companies controlled by public authorities,
- companies listed on the stock exchange that are included in the FTSE MIB index.
This mechanism is the so called “split payment” (or “scissione dei pagamenti”).
In the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, the seller or the supplier may reduce the taxable amount of the transaction.
If the relevant person does not make use of this possibility and VAT was applied according to the split payment mechanism, the application for refund may be submitted by the seller mentioning the recipient as beneficiary or by the recipient with the signature of the seller.
Italian Tax Administration – Letter ruling No. 424 of the 22 June 2021
Fausto Capello
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