Law 166/2024 was published in the Official Journal under number 267 of 14 November 2024, converting Legislative Decree 131/2024 (the so-called EU Infringement Rescue Decree), and contains provisions for the closure of a series of infringement procedures with the European Union, including one concerning the VAT regime for the secondment of personnel.
Article 16-ter of this decree discusses the repeal of paragraph 35 of article 8 of Law 67/1988, putting an end to the non-applicability regime of VAT with regards to loaning and secondment of personnel for which only the reimbursement of the relative cost is due.
This regulatory change steers towards calls from the Court of Justice of the EU which, in the ruling of 11 March 2020 (C-94/19), declared Italian legislation as incompatible with EU provisions on VAT. The Court had underlined that the onerous nature of the service, even in the absence of a profit margin, implies the existence of a direct link between the service provided and the service received, thus making the operation taxable for VAT purposes.
The Italian regulatory framework had excluded secondments of personnel from the scope of VAT, provided that the reimbursement of costs was limited to salary, social security and tax obligations. This approach had also been consolidated at the judicial level, with rulings by the Supreme Court of Cassation which had confirmed the exclusion from the scope of VAT in relation to these operations, on the condition that the secondment did not entail any profit margin for the seconding party. Only following the ruling of the European Court of Justice in question has the Italian judiciary progressively aligned itself with this interpretation, excluding the possibility of continuing to consider secondments of personnel as irrelevant for VAT purposes, even if carried out for the mere reimbursement of costs.
The repeal of paragraph 35 of article 8 of Law 67/1988 therefore establishes a new approach that aligns the tax framework of personnel secondment with European standards. Starting on 1 January 2025, all secondments and loans of personnel will be subject to VAT even if the reimbursement is limited only to the costs incurred.
However, in the absence of definitive findings, the previous behaviors adopted by taxpayers in compliance with the earlier legislation remain valid: indeed, paragraph 2 of article 16-ter under examination here states that the new provisions shall only apply to contracts stipulated or renewed from 1 January 2025 onwards.
