Italy Tax Agency Clarifies VAT Treatment of Services Covered by Public Contributions

The Italian Revenue Agency June 7 issued Answer No. 131/2024, clarifying the VAT treatment of services provided to beneficiaries by public bodies through implementing entities. The taxpayer, a public body promoting advanced and innovative technological services through the National Recovery and Resilience Plan, provided state aid in the form of direct contributions and subsidized services to beneficiaries involved in innovative projects. The taxpayer sought clarification on the VAT treatment of the services. The Tax Agency clarified that: 1) when public contributions only cover part of the services, the implementing party must apply VAT to the amount paid by the service ...