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Italy IT support services for financial services are VAT exempt

  • VAT
  • 18 March 2013 | Richard Asquith

Italy IT support services for financial services are VAT exempt

The Italian Supreme Tax Administration Court has ruled that Information Technology services provided as part of a Italian VAT exempt financial services may also enjoy a VAT exemption.

The review concerned IT processing services providing by a company working on credit card payments for banks.  Since the support was essential to ensure the provision of the service and processing of electronic payments, it should also be considered a financial service.

Key to separate input VAT on exempt and non-exempt services

This means that the company should not charge Italian VAT to its bank customers.   However, in turn, it may not recover any input VAT it suffers as a direct element of providing the card payment processing services.  It is therefore important to determine a fair split of input VAT if the company was also providing non-VAT exempt services to VAT liable customers.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which this year won International Tax Review's Tax Technology Firm of the Year. Richard qualified as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.