Companies listed excluded from split payment starting from July 1st
Starting from July 1st, companies listed in the FTSE MIB index of the Italian Stock Exchange, already identified for VAT purposes, will no longer be subject to the split payment mechanism.
This change, which is part of Italy’s broader commitment to gradually eliminate this special measure, was included in EU decision no. 2023/1552 and published in the Official Journal of the European Union L. 188 on July 27, 2023, and is now officially implemented with the tax decree approved on Thursday, June 12, 2025, by the Council of Ministers.
Italy has been authorized to apply the split payment mechanism until June 30, 2026, after which the possibility of using this special measure will be definitively excluded. The halt, starting from July 1, 2025, to split payment for the transfer of goods and services provided to listed companies is therefore part of a gradual process that will culminate on June 30, 2026, at which point this special measure will no longer be applicable to the subjects currently affected.
It should be noted that split payment is the mechanism under which VAT is indicated on the invoice by the seller but is paid directly to the Treasury by the buyer or client, thereby separating the payment of the amount from the payment of the tax (see Revenue Agency circular no. 1/2015). It is a temporary measure that deviates from the normal application of VAT and requires authorization from the Council of the European Union. Initially granted by decision no. 1401/2015, it was then extended by decision no. 784/2017 and further extended until June 30, 2026, by decision no. 1552/2023.
The split payment mechanism will no longer apply to the transfer of goods and services relevant for VAT purposes, documented by invoices issued to listed companies included in the FTSE MIB index; these transfers of goods and services will revert to being invoiced under ordinary methods.
This change means that suppliers will need to adjust their invoicing methods towards listed companies, applying, as mentioned, the usual tax shift, except in cases where reverse charge applies; in this regard, it is worth noting that there will be no changes for invoices subject to the reverse charge scheme.
From a more practical perspective:
– the seller will no longer indicate “S” (split payment) in the VAT due field of the electronic invoice and must include the tax charged to the customer in the periodic settlement;
– the buyer will pay the tax to the supplier along with the payment and will be able to deduct it.
Suppliers will no longer accumulate a VAT credit since the application of the normal tax shift, instead of split payment, will prevent suppliers from finding themselves in a position of structural credit. Transactions made with such listed companies will generate output VAT to be offset against deductible VAT arising from purchases and imports.
The restoration of the ordinary method of tax application will also impact the determination of the VAT advance, as suppliers of listed companies will have to account for transactions that include VAT. Conversely, listed companies will no longer have to consider the VAT payable related to purchases in calculating the VAT advance.
From an accounting perspective, the behavior that a supplier to a FTSE MIB listed company will need to adopt will be as follows.
Starting from July 1, 2025, the supplier will no longer be required to issue the invoice indicating that it is an operation subject to the split payment mechanism but must regularly record the tax indicated in the invoice; thus, the tax, contrary to what has happened so far, will not be deducted from the total credit with respect to the listed company.
The value-added tax stated on the invoice will contribute to the supplier’s periodic VAT settlements.
This regulatory change requires all operators to verify whether any of their clients are listed companies and to immediately adjust their invoicing systems.
For previous invoices (dated for example June 30, 2025), even if received from the listed company after July 1, the split payment regime will continue to apply.
In the event that, after June 30, 2025, a listed company receives an invoice dated July 2025 that does not fall within exempt cases and mentions the split payment regime, it must request a credit note from the supplier according to Article 26 of DPR 633/1972. Furthermore, it will be necessary for the supplier to reissue the invoice, as the company will not be able to make the payment directly or deduct VAT in the periodic settlement due to the error present in the document received.
