Italy Tax Agency Clarifies Application of Reduced VAT Rate for Artistic Foundry

The Italian Revenue Agency Jan. 14 issued Letter No. 4/2026, clarifying the application of the reduced VAT rate for an artistic foundry involved in producing contemporary artworks. The taxpayer, an artistic foundry company, created artworks based on models, designs, and supervision supplied by artists or art gallery clients. The taxpayer argued that the sale of the produced pieces should qualify for the 5 percent reduced VAT rate. Upon review, the Tax Agency clarified that: 1) the taxpayer’s activity constituted a provision of services, not artwork sales; 2) because the taxpayer wasn’t the author or rights holder, its services didn’t qualify ...