Provision of services rendered between two branches of the same head office (based in Germany), that are established respectively in Italy and in the UK, in the peculiar circumstance of and this latter (i.e. the UK branch) is being part of a VAT group in the UK, are out of the scope of application of VAT, since the VAT Group set up in a third country (UK) is not comparable to a VAT Group set up in an EU Member State.

With such a clarification (Reply to ruling 314/2023), the Italian Tax Authorities supersedes a former interpretation (Reply to ruling 756/2021) where they concluded that, even after the Brexit, the Skandia case principles were applicable also in case of a VAT Group set up in the UK (and thus at that time the Italian Tax Authorities had concluded that the head office and its branch were no longer a single taxable person for VAT purposes due to the fact that one of them was part of a UK VAT Group). The reversal of the interpretative guidance of the Italian Tax Authorities is in line with the guidelines resulting from the 119th meeting of 22 November 2021 of the VAT Committee that has taken the view that the VAT grouping scheme constitutes an independent concept of EU law and consequently persons established outside the European Union who are benefitting from a VAT grouping scheme in that country cannot be treated as a single taxable person for the purposes of EU VAT.