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The split payment invoice: accounting and taxation of the VAT number

The split payment invoice: accounting and taxation of the VAT number

By Giorgia Frezza

Published: 28 April 2025

The split payment invoice is a new payment method made available to public bodies and companies. But what are the relevant regulations? How are these invoices accounted for?

The rules and procedures for using and accounting for split payment invoices are very complex and are laid down in multiple regulations.

Find out in our article everything you need to know about split payment invoices and especially how to record these invoices in your VAT return.

What is a split payment invoice?

The tax legislation, through Law 190/2014, has devised a particular system of VAT settlement, called Split Payment, or " split payment."

This invoicing method is regulated by Article 17-ter of Presidential Decree 633/1972, entitled "Transactions with public bodies and other entities and companies".

Split payment is used for the supply of goods and services performed by companies in relation to:

  • Public Administrations;
  • one of the other entities listed exhaustively in Article 17-ter, paragraph 1-bis, of Presidential Decree No. 633/1972 (for example: economic public entities, special companies, public personal services companies, listed companies included in the FTSE MIB index).

The split payment invoice was born as an optional payment method to those already in force and remained so until 2017. However, it was extended further in recent years and came into full force in 2019.

The rules of the split payment invoice

It must be clarified that in this particular VAT settlement system, the person who has to materially pay the VAT amount to the State is the transferee/buyer, i.e. a PA, and not the supplier/service provider.

If you decide to make use of the split payment invoice, it is advisable to explain and clarify all the rules to which this payment formula is subject:

  • the Public Entity (or one of the other entities indicated above) transferee/purchaser shall pay to the transferor/provider the amount indicated on the invoice net of tax (i.e. VAT);
  • the assignor/supplier, pursuant to Article 2 of Ministerial Decree 23/1/2015 , shall proceed with the registration of the invoices issued (Articles 23/24 of Presidential Decree 633/1972) without taking into account the tax recorded in the periodic settlement
  • the same assignee/purchaser shall pay the portion of VAT indicated on the invoice to the State;
  • the same assignor/supplier will have to specify that the invoice is issued following the Split Payment system
  • the supplier will generate the invoice specifying both the taxable amount and the VAT (rate and amount), but writing at the end, as the final amount due, only the amount net of VAT .

fattura 24

Who can benefit from the split payment invoice?

Among the entities that are required to apply this special payment regime are:

  • national, regional and local public economic entities , including special companies and public personal service companies;
  • foundations in which the shareholding of public administrations amounts to at least 70% of the public endowment fund;
  • companies managed , pursuant to Article 2359(1)(2) of the Civil Code, directly by the Prime Minister's Office and ministries ;
  • companies managed directly or indirectly by public administrations ;
  • investee companies in which the public administrations own a total percentage of the capital of not less than 70%;
  • listed companies registered in the FTSE MIB index of the Italian Stock Exchange and subject to VAT.

self enti locali

In case of doubt, in order to understand which Public Administrations (PAs) are eligible for the split payment mode, one can refer exclusively to the provisions of Article 5-bis of the Decree of 23 January 2015.

Thanks to the reference of the aforementioned Article 5-bis to Paragraph 209 of Law No. 244 of 2007, and to the definition of public administrations in Article 1, Paragraph 2 of Law No. 196 of 31 December 2009, the recipients of the split payment were readmitted among the entities on the iPA list.

Entities classified as public service providers, which are exempt from the electronic invoice obligation for the public administration, are not included among the recipients.

Revenue Agency Circular No. 27/E of 7 November 2017 also specifies in detail the following:

"For the purposes of the exact identification of the PAs required to apply the split payment system, reference should be made to the list published on the website of the Index of Public Administrations, www.indicepa.gov.it (hereinafter iPA), without taking into account, however, the entities classified in the category of 'Public Service Operators', which, although included in the aforementioned list, are not recipients of the electronic invoicing obligation."

informazione fiscale

The split payment invoicing obligation was further extended in implementation of Directive 2014/55/EU, to public procurement by Legislative Decree No. 148 of 27 December 2018.

Article 1 provides that the directives of the decree apply to contracting authorities and contracting entities.

The split payment invoice procedure

We proceed to the analysis of the split payment invoice procedure in relation to VAT return transactions.

The Role of Suppliers

With regard to supplies of goods and services performed, suppliers are required to issue an invoice with the annotation:

"split payment" or ''split payment'', according to Article 17-ter of Presidential Decree No. 633/72.

If the split payment invoice does not include this endorsement, the administrative penalty indicated in Article 9(1) of Legislative Decree No 471/97, i.e. an administrative penalty of between €1,000 and €8,000, applies.

However, this sanction is not taxable for invoices issued before 7 November 2017, the date of publication of the aforementioned circular, as specified in Ministerial Circular No. 27/E/2017.

What are the tax liabilities for the supplier?

At the operational level, according to the specifications provided by M.C. No. 27/E/2017, which recalls the previous M.C. No. 15/E/2015, the supplier

  • must not enter in the period settlement the VAT payable specified in the invoice;
  • must record in the ''VAT sales'' register the transactions carried out and the respective VAT not collected from suppliers;
  • must record the invoice issued under the split payment scheme, specifying the taxable rate and the amount of tax, in a separate manner, by means of noting the appropriate VAT codes.

Obligations of purchasers

All entities that fall under public administrations and that make purchases in the institutional sphere pay VAT through the F24 public entities form. To be more precise, they must specify the appropriate tax code by the 16th day of the month following the month in which the VAT is deemed chargeable.

The Implementing Decree (Ministerial Decree of 27 June 2017, subsequently amended by Ministerial Decree of 13 July 2017) with reference to Public Administrations and companies, identified for VAT purposes, that make purchases of goods and services in the exercise of commercial activities requires that they may make VAT payments by two payment methods that are equivalent to each other.

The first method: payment by the 16th of the following month

The first method involves the payment of VAT by submitting the F24 form. The latter must be submitted by the 16th of the month following the month in which the tax is deemed chargeable.

This method of payment concerns public administrations carrying out commercial activities and other businesses.

Payment must be made without alternative offsetting and using the specific tax code.

The second method: annotation by the 15th of the following month

The second option represented by public administrations engaged in commercial activities and companies, for all invoices where split payment applies, have the option of

  • pursuant to Articles 23 or 24 of Presidential Decree No. 633/72, record the invoices in the register by the 15th of the month following the month in which the tax is considered due, with reference to the previous month;
  • charge the VAT entered in the register for the periodic settlement of the month in which it is due or the quarter in question if quarterly settlements are made;
  • record the invoices in the purchase register in order to exercise the right to deduct tax pursuant to Article 25 of Presidential Decree No. 633/72

Tax codes in split payment invoices

Resolution No. 139/E/17 established the tax codes for VAT due by public administrations and companies.

In order to make a correct payment of the VAT due by public administrations and companies, the following tax codes and entries must be filled in on the 'F24' and 'F24 Public Entities' (F24 EP) forms.

The tax code on the F24 form

If an F24 form is to be filled out, the following tax code is chosen:

" 6041", entitled " VAT payable by PP.AA. and COMPANIES identified for VAT purposes - split payment for purchases in the exercise of commercial activities - Article 5, paragraph 01, Ministerial Decree of 23 January 2015".

When completing the F24 form, the above code must be entered in the " Treasury" section exclusively with reference to the amounts indicated in the column " debit amounts paid".

Also when filling in the form, the fields 'instalment/region/reference month' and 'reference year' must be filled in, with the month and year of the tax for which the payment is being made, in the formats '00MM' and 'YYYY' respectively.

The tax code with the F24 EP form

If an F24 form is to be completed, the following tax code has been chosen:

" 621E", entitled " VAT payable by PP.AA. and SOCIETIES identified for VAT purposes - split payment for purchases in the exercise of commercial activities - Article 5, paragraph 01, Ministerial Decree of 23 January 2015".

When completing the " F24 Public Entities" form, the following fields must be filled in as follows:

  • you must enter the tax code and the name/company name of the public administration making the payment in the "CONTRIBUENTE" section;
  • in the "PAYMENT DETAIL" section, you must specify
    • in the "section" field, the value "F" (Treasury);
    • in the "tax code/causal" field, the tax code;
    • in the "reference A" field, the month for which the payment is being made, in the format "00MM
    • in the field "reference B", the tax year for which the payment is made,m in the format "YYYY".

Cases other than those described above must issue the VAT payment as a result of the split payment, specifying the following tax codes, "620E" and "6040", established by Resolution No. 15/E/15, or directly to the State budget revenue.

Do you still have questions about split payment invoices? Or have we managed to clear all your doubts? If something is not clear to you, please do not hesitate to contact us in the feedback section.

Article translated from Italian