The social and health services provided to users hospitalised in rehabilitation centres benefit from the VAT exemption referred to inart. 10 n. 21) of Presidential Decree 633/72 even when they are provided outside the hospital facility, provided that they are included in the same global service contract. This is one of the clarifications provided by the Revenue Agency with the response to question n. 179 yesterday, September 12, 2024.
The Agency recalls that the exemption in question, referring to the services provided by nursing homes and similar entities, applies when the services provided ensure accommodation (possibly together with other ancillary services) for people in need of protection and care.
This also applies to services provided by third parties, provided that these, in their entirety, substantially characterise the overall management of the structure.
The specific case concerned a foundation that managed residential and day rehabilitation centres, and which intended to entrust an instrumental company, with the qualification of social enterprise, with the overall management of the services to be provided to users.
The Agency clarified that the exemption referred to in the aforementioned art. 10 n. 21) applies to services provided by the social enterprise for the benefit of hospitalized users, even when provided in day centers.
As regards, instead, the services provided in the same centres to non-hospitalised subjects, the Agency specifies that such services may possibly benefit from the VAT exemption referred to in theart. 10 n. 18) of Presidential Decree 633/72, provided that the objective and subjective requirements set out in the law are respected (diagnostic, treatment and rehabilitation healthcare services provided by healthcare workers subject to supervision by the Ministry of Health).
Copyright 2024 © EUTEKNE SpA – all rights reserved
VAT on home care services
Table of Contents
VAT Exemptions for Social and Health Services in Rehabilitation Centres
Rehabilitation centres play a vital role in providing essential social and health services to individuals in need of protection and care. In recognition of the importance of these services, governments have implemented Value-Added Tax (VAT) exemptions to support the provision of these services. This article delves into the VAT exemptions for social and health services provided in rehabilitation centres, highlighting the recent clarification by the Revenue Agency.
VAT Exemption for Hospitalized Users
According to the Revenue Agency, social and health services provided to users hospitalized in rehabilitation centres are exempt from VAT, as referred to in Article 10, paragraph 21, of Presidential Decree 633/72 [[1]]. This exemption applies not only to services provided within the hospital facility but also to those provided outside the facility, as long as they are included in the same global service contract. This clarification is a welcome relief for rehabilitation centres, as it enables them to focus on providing high-quality services to their patients without the burden of VAT.
Services Provided by Third Parties
The VAT exemption also applies to services provided by third parties, such as social enterprises, that substantially characterise the overall management of the structure. This means that when a foundation or other entity entrusts a social enterprise with the overall management of services to be provided to users, the services provided by the social enterprise will also be exempt from VAT [[1]].
Services Provided to Non-Hospitalized Subjects
While the VAT exemption applies to services provided to hospitalized users, services provided to non-hospitalized subjects in the same centres may also be eligible for exemption. The Revenue Agency specifies that these services may benefit from the VAT exemption referred to in Article 10, paragraph 18, of Presidential Decree 633/72 [[1]].
European Union VAT Rates
It is essential to note that VAT rates vary across the European Union. According to the European Commission, Member States apply different VAT rates, including reduced rates, for specific goods and services, such as renovation and repairing services in the health sector [[2]]. Healthcare professionals, including doctors, dentists, and nurses, must account for VAT on goods and services provided to patients, with certain exceptions [[3]].
Conclusion
the Revenue Agency’s clarification on VAT exemptions for social and health services provided in rehabilitation centres is a significant development for the sector. By exempting these services from VAT, governments can support the provision of essential services to individuals in need of protection and care. Rehabilitation centres, foundations, and social enterprises can now focus on delivering high-quality services, free from the burden of VAT, and concentrate on making a positive impact on the lives of those they serve.
References:
<a href="https://taxation-customs.ec.europa.eu/system/files/2021-06/vatratesen.pdf”>[1]
10 importance of rehabilitation
VAT Exemptions for Social and Health Services in Rehabilitation Centres
The importance of social and health services in rehabilitation centres cannot be overstated. These services provide essential care and support to individuals in need, helping them to recover and regain their independence. However, the VAT treatment of these services can be complex and nuanced, with different rules applying depending on the specific circumstances. In this article, we will explore the VAT exemptions for social and health services in rehabilitation centres, with a focus on the recent clarifications provided by the Revenue Agency.
VAT Exemption for Social and Health Services
According to Article 10, paragraph 21 of Presidential Decree 633/72, social and health services provided to users hospitalized in rehabilitation centres are exempt from VAT. This exemption applies not only to services provided within the hospital facility but also to those provided outside the facility, as long as they are included in the same global service contract [[1]].
The Revenue Agency has clarified that this exemption applies to services provided by nursing homes and similar entities, as well as to services provided by third parties, as long as they substantially characterize the overall management of the structure [[1]]. This means that services provided by social enterprises, for example, can benefit from this exemption.
Case Study: Foundation Managing Rehabilitation Centres
A recent case study highlights the application of this exemption. A foundation that managed residential and day rehabilitation centres intended to entrust an instrumental company, with the qualification of social enterprise, with the overall management of the services to be provided to users. The Agency clarified that the exemption referred to in Article 10, paragraph 21 applies to services provided by the social enterprise for the benefit of hospitalized users, even when provided in day centers [[1]].
VAT Exemption for Diagnostic, Treatment, and Rehabilitation Services
In addition to the exemption for social and health services, there is another VAT exemption that may apply to services provided in rehabilitation centres. According to Article 10, paragraph 18 of Presidential Decree 633/72, diagnostic, treatment, and rehabilitation healthcare services provided by healthcare workers subject to supervision by the Ministry of Health are exempt from VAT. This exemption applies to services provided to non-hospitalized subjects, as long as the objective and subjective requirements set out in the law are respected [[1]].
International Perspective
The VAT treatment of healthcare services is not unique to Italy. In fact, the European Union has established guidelines for the VAT treatment of healthcare services [[2]]. In Italy, the VAT treatment of healthcare services provided by non-conventional facilities, such as those provided by social enterprises, can be complex [[3]]. However, the Revenue Agency’s clarification on the application of the VAT exemption for social and health services in rehabilitation centres provides much-needed guidance for businesses operating in this sector.
Conclusion
the VAT exemptions for social and health services in rehabilitation centres are an essential aspect of the Italian tax system. The Revenue Agency’s clarification on the application of these exemptions provides much-needed guidance for businesses operating in this sector. By understanding the nuances of the VAT treatment of healthcare services, businesses can ensure compliance with tax laws and regulations, while also providing essential care and support to individuals in need.
References:
