The split payment procedure was introduced in the VAT regulation by art. 1, para. 629, of Law 23 December 2014, no. 190, and is effective starting from 1st January 2015. In its original version, and up to 1st July 2017, the split payment did not concern professionals and other subjects to which withholding tax applied; in fact, para. 2 of art. 17-ter of D.P.R. 26 October 1972, no. 633 originally excluded from the mechanism “the considerations for service provisions subject to withholdings as income tax”.
Later, Law Decree 24 April 2017, no. 50 extended the categories of subjects concerned by the split payment and abolished the abovementioned paragraph 2, thus including also professionals and others being subject to withholdings, starting from invoices issued since 1 July 2017.
Now, the new government has reviewed the provisions taken by their predecessors and, in art. 12 of Law Decree 12 July 2018, no. 87, “Urgent provisions for the dignity of workers and of businesses” has excluded again from the application of the split payment mechanism invoices relevant to considerations to professionals issued after the effective date of the Decree, published in Official Gazette no. 161 of 13 July 2018, which came into effect the day after its publication (ref. art. 15).
The provision does not clearly explain the reason behind this decision, specifying only that art. 12 of the Decree provides for the abolishment of the split payment for those provisions of services rendered to those public administrations whose revenues are subject to withholdings pursuant to art. 25 of Presidential Decree no. 600 dated1973.
Therefore, starting from 15 July 2018 (day following the effective date of the provision), professionals must issue invoices (to those subjects listed under art. 17-ter of Presidential Decree no. 366/1972) according to normal procedures and apply VAT, if due, in relation to the realization of VAT taxable operations.
For more information, please contact Mario Spera.
