Anti-VAT fraud VAT splitting measure
The Italian Department of Finance has extend the list of companies which suppliers must apply VAT split payments on. This requires suppliers to pay the VAT element of their sales invoice into special, blocked VAT bank accounts with the tax office.
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Italy has been given permission to use split payments by the European Commission since 2015. But it may only apply to Business-to-Government transactions – which includes government controlled companies on the Italian stock market. In the past, Romania has been obliged by the EC to withdraw its blanket split payment scheme as being disproportionate. Polish split payments in fraud-prone sectors has been permitted since 2019. Turkey split payments places a % of the VAT element which must be paid directly to the authorities.
Customers under the Split Payment regime include:
- subsidiaries of the Presidency of the Council of Ministers and Ministries;
- subsidiaries of regions, provinces, metropolitan cities, municipalities or associations of municipalities;
- subsidiaries of previous companies;
- companies listed in the FTSE MIB index of the Italian Stock Exchange