Italian Revenue Agency Clarifies VAT Exemption for Co-Employment Costs in Business Networks

• The Italian Revenue Agency issued a letter on May 19, 2025
• The letter clarifies VAT treatment of co-employment costs under a business network contract
• A company formed under this contract hired staff and allocated costs to associated companies
• The company argued that VAT was not applicable to reimbursement of these costs
• The Agency clarified that reimbursement charges each company based on worker contribution
• It was determined that this reimbursement is a transfer of money not subject to VAT

Source: news.bloombergtax.com

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