- On 20 August 2025, the Italian Revenue Agency issued Ruling 216/2025, determining that services provided between fixed establishments of the same company that are part of an EU VAT Group are subject to VAT, effectively breaking the VAT unity between these establishments.
- The ruling clarifies that following Brexit, UK VAT Groups are not recognized under EU VAT law, meaning that the UK fixed establishment (ALFAUK) is considered a separate taxable person from the Italian fixed establishment (ALFAIT) for VAT purposes due to the Head Office’s participation in an EU VAT Group.
- Multinational companies should evaluate the implications of EU VAT Group membership on intra-entity transactions, as this can lead to unexpected VAT obligations for services exchanged between branches, even if those branches are not themselves part of an EU VAT Group.
Source EY
Latest Posts in "Italy"
- VAT Committee: Transfer Pricing Adjustments at Variable Prices May Be Relevant
- Italy Extends VAT Deduction Deadlines and Introduces Tax Settlement Mechanism
- 10% VAT on Energy Efficiency Services for Public Housing ESCOs
- Italy Extends Input VAT Deduction Deadline Under Enacted Tax Reform Corrections
- VAT or Registration Tax on Company Asset Transfers to Shareholders
