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Italy: VAT treatment of post-Brexit transactions between an Italian branch and a parent company belonging to a UK VAT Group

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On 3 November 2021, the Italian Revenue Agency issued ruling no. 756 explaining the VAT treatment of the transactions taking place in the post-Brexit period between an Italian permanent establishment and the parent company belonging to the English VAT group.  

 

An Italian branch is providing services to its UK head office. Both offices belonged to a UK VAT group. The company sought IRA’s clarifications for VAT purposes in  the post-Brexit circumstances. The Letter No. 756 states the following:

 

  • The U.K. VAT group is recognized post-Brexit 
  • The services provided by the Italian branch are relevant for VAT purposes 
  • If there are taxable operations in Italy, it may request a refund of the deductible excess pursuant to Article 30, second paragraph, letter d), of Presidential Decree no. 633 of 1972 

 

Source: Italian Revenue Agency, Letter No. 756/2021 

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