Advances from customers are subject to the same VAT regime applicable to the operation for which they were paid. If the sums collected for this purpose refer to services with differentiated treatment (eg taxability and exemption), it is up to the taxable person to identify the most appropriate allocation criteria, as long as they are objective, consistent with the service and verifiable. The down payment referable to the provision of taxable services will discount VAT at the ordinary rate; the down payment referable to exempt services will be subject to the exemption regime.
Sources:
See also
Latest Posts in "Italy"
- Italian Supreme Court Extends Direct Tax Principles to VAT in Offshore Company Cases
- Response No. 216/2025 – VAT Treatment of Transactions Between Permanent Establishments of the Same Foreign Entity Belonging to a VAT Group in Another EU MS
- eInvoicing in Italy
- Briefing document: Italy Clarifies VAT Treatment for Transfer Pricing Adjustments: Direct Supply Links Required
- VAT Deduction for Third-Party Goods Imports: Italian Tax Authorities’ Clarifications and Remaining Uncertainties