Italy Tax Agency Clarifies VAT Treatment, PE Rules for Intra-Community Purchases

The Italian Revenue Agency March 4 issued Letter No. 64/2025, clarifying the VAT treatment and permanent establishment (PE) rules for intra-community purchases. The taxpayer, a German medical technology company, indirectly controlled an Italian subsidiary company. The Italian company purchased and resold the goods of the German company. The Italian company included a machinery expert who was involved in providing technical and application assistance, participating in internal meetings, and consulting on the engineering of new machinery. The taxpayer sought clarification on VAT treatment of the purchases and the expert’s role as PE. The Tax Agency clarified that: 1) although the expert ...