New VAT Scenario for Employee Secondment: Changes Effective from 2025

• Personnel secondment is a common practice allowing employers to temporarily transfer employees to a third party to meet specific needs.
• As of January 1, 2025, significant changes have been made to the VAT treatment of personnel secondment.
• The new law subjects personnel secondment and lending to VAT, even if only the cost of personnel is reimbursed.
• This applies to agreements made or renewed from January 1, 2025, while previous operations are not penalized if they complied with past regulations.
• The reform aims to align national law with EU Court of Justice interpretations, ensuring VAT relevance for personnel secondment.
• Key elements include a direct link between the secondment service and payment, and the irrelevance of the compensation amount.
• There are interpretative doubts about the new VAT rules, with differing views from legal doctrine and the tax authority on what should be subject to VAT.

Source: ayming.it

See also

• C-94/19 (San Domenico Vetraria) – Judgment – Secondment of staff without markup is subject to VAT

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.

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