Italy: VAT treatment of real estate services for non-residents clarified
The Italian Revenue Agency issued Letter No. 65/2025, providing clarification on the VAT treatment of real estate-related services, including legal consultancy and brokerage services. The guidance was issued in response to a request from a taxpayer residing in Argentina who owned property in Italy and sought clarification on VAT territoriality for services related to the sale of the property and mortgage cancellation.
The agency outlined the following points:
- VAT territoriality: Under the general rule, VAT is due in the country where the client or provider is located. However, real estate services are subject to VAT in the jurisdiction where the property is situated.
- VAT applicability: The taxpayer’s residence status did not affect VAT obligations, as the services were directly connected to a property in Italy.
- Derogation from the rule: Although VAT applied to the transaction in question, certain services related to real estate in Italy are explicitly exempted from the standard VAT rules by legislative provisions.
This clarification provides guidance on VAT obligations for real estate services involving properties in Italy.
Source: agenziaentrate.gov.it
