New VAT Rules for Employee Secondment: Subjective, Objective, and Territorial Criteria Explained

The Italian tax authority examined the subjective, objective, and territorial requirements of the new VAT rules for personnel secondment.
The new regulation considers personnel secondment as a VAT-subject operation, following a European Court of Justice ruling.
The practice document references labor law, defining secondment as a temporary provision of workers by an employer to another entity.
The new law repealed a previous national rule that excluded personnel secondment from VAT if only cost reimbursement was involved.
VAT relevance for secondment services requires consideration of standard requirements, as detailed in the circular.
For subjective scope, secondment services require business activity; non-commercial entities must verify business organization only if secondment involves personnel from their institutional activity.
Secondment operations within the same VAT Group are generally not subject to VAT.
The document clarifies the objective scope, stating that secondment for consideration is a service under specific conditions.
A direct link exists between secondment and payment when they are mutually conditional.
The agency outlines criteria for qualifying payment as consideration for secondment.