Summary
- Italy secured continuation of its VAT split-payment mechanism following adoption, without discussion, of an EU Council Implementing Decision at the ECOFIN meeting on 10 July 2026. The derogation from the standard VAT Directive rules authorises Italy to keep requiring public administrations and certain entities to pay the VAT element of supplier invoices directly to the tax authorities, rather than to suppliers, extending the regime through to 30 June 2029. [mef.gov.it]
- The renewal takes effect from 1 July 2026 with no interruption, ensuring covered suppliers to public administrations and listed entities continue applying the mechanism seamlessly without any compliance gap. Continuity was a key concern for affected taxpayers, who rely on stable rules for cash-flow planning and invoicing configuration. The uninterrupted extension avoids the operational disruption that would arise from even a brief lapse in the authorisation’s validity. [mef.gov.it]
- Scope remains unchanged under Article 17-ter of Italy’s VAT law, with FTSE MIB-listed companies still carved out of the mechanism. Italy justifies the regime as an effective anti-fraud tool, arguing that split payment combined with e-invoicing controls has materially improved VAT collection and reduced losses. The Commission’s proposal (COM(2026) 281) supported continuation, reflecting the measure’s proven revenue benefits despite the well-documented cash-flow costs it imposes on affected suppliers. [vatupdate.com]
Sources
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