- Permutative operations for VAT are characterized by the nature of the consideration, which is not a payment in cash but the transfer of a good or the provision of a service.
- Each transaction is subject to its own rules and must be examined individually.
- The Italian Revenue Agency has confirmed this in response to an inquiry.
- In the specific case examined, a company received a contribution from a municipality for the construction of a school building.
- This contribution is considered a consideration for the obligations assumed by the company and, for the part financed by the municipality through the transfer of land, it is considered a barter (service provision versus transfer of goods).
- The transfer of an immovable property is considered a payment in kind subject to VAT separately from the related service, based on the normal value of the transferred goods.
- In this case, since the barter occurs between two VAT-registered entities, VAT is applied according to the respective rates for each operation.
- For service provisions, VAT becomes due at the time of payment, unless the company has issued an invoice in advance under Article 6 of the DPR 633/72.
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.