Italy Tax Agency Clarifies VAT Treatment on Corporate Restructuring of Group Companies

The Italian Revenue Agency May 31 issued Letter No. 318/2022, clarifying the VAT treatment on the transfer of functions and personnel between a parent company and a permanent establishment (PE), and between two PEs. A foreign registered company owned a PE located in Italy. The parent company had three divisions located in different territories, based on the products and services offered. The parent company conducted a corporate restructuring under transfer pricing guidelines. The company sought clarification as to whether the restructuring would be excluded from VAT taxation. The tax agency clarified that: 1) the corporate restructuring doesn’t trigger the subject ...