In particular, article 18 of the above Law Decree introduced the following two amendments to the VAT legislation
- It expanded the VAT exemption regime to health services rendered to patients also by non-panel (i.e., not part of the national health service) hospitals, centers for medical treatment or diagnosis and other similar duly recognized establishments, provided that (i) such non-panel entities purchased the VAT-exempted services from a healthcare professional and (ii) such services are part of a more complex hospitalization and care service supplied by the same entity to the patient.
Before the amendment was introduced, the VAT exemption was applicable only to compensations for health services charged by public or panel hospitals/medical centers. The amendment now extends the VAT exemption to compensation for health services recharged to patients also by non-panel hospitals and medical centers, thus overcoming an unequal treatment between public/panel entities and non-panel entities.
- It reduced the applicable VAT rate from 22% to 10% of the following services:
- Hospitalization and care services not already included within the list of exempt medical services provided for by article 10, number 18) and 19) of the Italian VAT Act (i.e., Presidential Decree No. 633/1972) – This means that hospitalization and care services rendered by non-panel hospitals and medical centers should now also be subject to the reduced 10% VAT rate (and no longer to the standard 22% VAT rate).
- Accommodation services for caregivers of hospitalized patients including those rendered by non-panel hospitals and medical centers.
Not having the Law Decree provided for a specific date of effectivity of the above amendments, they should be deemed to have entered into effect on the date in which the Law Decree was published in the Official Gazette, i.e., on 22 June 2022.
For sake of completeness, we highlight that the Law Decree must be converted into Law within 60 days from the effective date and in such a process some amendments could be introduced to the provision.
The above amendments are significant to the medical and healthcare business and, in particular, to non-panel hospitals and medical centers.
We remain at your disposal to explain the practical and future, and possibly past, implications of the new law provisions.
