Changes on split VAT payment in Italy

The authorities have published updated lists of the public entities that must use the mechanism of split VAT payment in Italy.

10 October, 2017


Government announces updates on split VAT payment in Italy

 The updated list includes companies directly or indirectly controlled by local public bodies or the Presidency of the Council of Minister and the Ministries, as well as those companies listed on the Italian FTSE MIB.

More detailed information about these companies is available on the website of the Ministry of Economy and Finance.

What is the split payment mechanism system?

The split VAT payment was introduced in Italy to reduce VAT fraud in transactions with public entities. Under this mechanism, public entities must “split" the payment of their invoices by paying the net amount of the transaction to their suppliers and transferring the VAT directly to Italian tax authorities.

Other European countries, such as Poland or Romania, will implement similar measures during 2018. Poland will introduce voluntary split VAT payment mechanism on B2B domestic transactions, while in Romania this system will become mandatory for all businesses.

 


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