Italy Tax Agency Clarifies VAT Treatment of Services Supplied Between Permanent Establishments of Nonresident Entity

The Italian Revenue Agency Aug. 20 issued Letter No. 216/2025, clarifying the VAT treatment of supplies of services between permanent establishments (PEs) of a nonresident entity. The taxpayer, an Italian PE of a nonresident entity, received information technology (IT) and back-office services from its U.K. counterpart that was part of a U.K. VAT group. The taxpayer sought clarification regarding the VAT treatment of intra-group services. The Tax Agency clarified that: 1) services supplied by or to a U.K. VAT group are no longer taxable, and are exempt from VAT since the VAT group rules only apply to EU VAT groups; ...