Italy Tax Agency Clarifies VAT Treatment of Payment Institution in Buy Now Pay Later Sector

The Italian Revenue Agency June 10 issued Letter No. 152/2025, clarifying the VAT treatment of a payment institution (IP) operating in the Buy Now Pay Later (BNPL) sector. The taxpayer, a registered IP operating in the BNPL sector, enabled consumers to purchase the goods or services of merchants through its platform and defer the applicable payments, while merchants received credit for relevant amounts immediately. The taxpayer sought clarification on whether the single fee that it will receive starting from 2025 for the service offered to merchants would be subject to the ordinary 22 percent VAT rate, and whether the acquiring ...