The Italian VAT Law provides that „the loan or secondment of employees who are reimbursed only for related costs shall not be considered relevant for VAT purposes“. In other words, on the basis of the Italian VAT Law, the reimbursement of labour costs should not be regarded as a service which falls within the scope of VAT and is therefore not subject to VAT. On this basis, the Italian authorities considered that San Domenico was not entitled to recover input VAT on invoices issued by Avir, since VAT should not have been collected. The Italian Supreme Court has asked the Court of Justice to give a preliminary ruling on the compatibility of this provision with EU law. The question arose as to whether the distinction drawn by the Italian legislation between the posting of staff (which does not fall within the scope of VAT) and other possibilities for the supply of labour (subject to VAT) was contrary to the principle of fiscal neutrality. Human resources are available when a party makes its employee available to another party, normally by posting the worker, for remuneration. The consideration for such a benefit need not necessarily be remuneration, but may constitute a burden on the employer vis-à-vis the other party as regards wages, social security and similar employment costs incurred during the posting of the worker. Consideration may also be paid if these costs are borne directly by the other party to the employee, HMRC, etc. – but see the section below on a practice statement according to which, under these conditions, concessionary treatment applies to certain shipments of personnel. However, the uncertainty resulting from that `change of attitude` was due to the rule established by Article 8(35) of Law No 67/1988 (that is to say. B Finance Act of 1988), which states that `loans or secondments of staff for which only the reimbursement of expenses paid for VAT purposes is not considered relevant`.

(a) exercises exclusive control over the assignment and performance of the worker`s tasks during the period of posting, while the Italian tax authorities should not be able to require payment of VAT for previous postings where there was no VAT on invoice (as is apparent from previous ECJ decisions that, if the VAT exemption has already been applied, the tax authorities cannot reopen definitively closed periods or issue tax notices for open periods (C-326/15 and C-605/15) and, in a similar case, the Italian tax authorities have required payment of VAT by means of an inadmissible VAT exemption for driving hours (C-449/17) (Advance Ruling No 79/E/2019). The question remains open as to what approach they will take here. There are certain exceptions in which the supply of personnel cannot fall within the scope of VAT. These include postings between: according to the ECJ, Article 2(1)(c) and Article 24(1) of the Main Turnover Tax Directive preclude national legislation exempting the posting of staff from VAT: if there is a direct link between the posting and payment to the Member`s employer, there is a service regardless of the amount of the payment, which should be subject to VAT (Case C-94/19, San Domenico Vetraria). While the decision on Italian legislation on the secondment of staff has been taken, similar legislative provisions concerning the provision of staff should also be concerned. Nor is there a taxable benefit where a posting involves a temporary suspension of the initial employment contract and the person to whom the worker is posted becomes an employer for the period concerned. This decision is supported by the decision in the Commonwealth Telecommunications Bureau case (LON/75/25). In 2004, Avir A.p.A.

was appointed . . .