Italian Budget Law 2017 implemented the VAT Group regime provided by Article 11 of the EU VAT Directive. On 18 April 2018, the Ministerial Decree providing implementing regulations was published in the Official Gazette. In order to apply for the VAT Group regime starting from 2019, Groups shall file the option by 15 November 2018.
Under the VAT Group regime, Group members are treated as a single taxable person and supplies of goods and services between Group members are no longer relevant for VAT purposes.
LED Taxand briefly describes the Italian VAT Group regime and its main advantages.
This regime will be mostly beneficial to taxable persons with a limited or nil VAT deduction right (e.g. banks, and insurance companies for the financial sectors). The setup of a VAT Group would thus lower the non-deductible VAT costs incurred by these VAT persons since VAT exempt supplies of goods and services to Group members are no longer relevant for VAT purposes.