Edited by Felice de Lillo, Davide Accorsi, Amélie Mammone and Cristina Mosca
The Italian tax authorities through its reply to the legal consultation request no. 7 of 31 March 2026, provided clarifications regarding the recovery of VAT on amounts due as payback on medical devices.
Applicable legislation
As a preliminary matter, it is useful to summarize the legislative measures about payback on medical devices.
The mechanism of payback on medical devices, provided by Article 9-ter of Law Decree no. 78/2015, requires companies supplying medical devices to contribute to the recovery of any excess over the regional spending cap for the purchase of medical devices for the years 2015–2018, with variable rates ranging from 40% to 50%.
The Regions and Autonomous Provinces, pursuant to Article 9-ter, paragraph 9, of the aforementioned Law Decree no. 78/2015, are required to define, by their own measure, the list of supplying companies subject to recovery for each year.
With the Decree of 6 July 2022, the excess over the medical devices spending cap was certified and quantified for each region for the years from 2015 to 2018.
Such excess is calculated on each company’s turnover inclusive of VAT (Article 9-ter, paragraph 8, of Law Decree no. 78/2015).
Subsequently, Article 9 of Law Decree no. 34/2023 specified that:
- companies may deduct VAT by deducting it from payments made in accordance with Article 27 of Presidential Decree no. 633/1972;
- the right to VAT deduction arises at the time payments are made and must be exercised through the issuance of an accounting document containing the details of the regional and provincial measures identifying the recovery rates for each company;
- the payback mechanism qualifies as a reduction of the taxable base of the invoices originally issued, pursuant to Article 26, paragraphs 2 and 5, of Presidential Decree no. 633/1972;
- the Regions and Autonomous Provinces are required to communicate to the companies the amount of VAT on the sum subject to payment, calculating it on the basis of the invoices issued by the companies to the National Health Service and considering the different VAT rates applicable to the goods purchased.
Finally, Article 7 of Law Decree no. 95/2025 reduced the payback obligation to 25% of the amounts originally due, with payment by 9 September 2025 as full discharge of the obligation.
Reply to legal consultation request no. 7/2026
In the reply under review, the Applicant is a trade association representing companies that supply medical devices to the Regional National Health Service, which carried out the payback payments on medical devices by 9 September 2025.
It was also disclosed that the Regions and Autonomous Provinces have, in most cases, only provided payback rates inclusive of VAT.
That said, the Association requested clarifications on three aspects of the payback on medical devices:
- the methods for deducting VAT from the payback payment, considering that many Regions have not communicated VAT rates analytically;
- the content and methods of presenting the accounting document to be issued in the Periodic VAT Settlements Communications and in the 2026 VAT return (year 2025);
- the deadlines for exercising the right to VAT deduction.
With regard to the first question, the Italian tax authorities clarified that, pending a specific communication from the Regions and Autonomous Provinces, the supplying companies of medical devices, holding the sales invoices relating to medical devices, may determine VAT analytically using a percentage allocation criterion by rate. In practice, for the calculation of amounts, it is necessary to compute, for each VAT rate, the impact of the relevant turnover in relation to total turnover.
For example, if in 2015 Company X sold devices to Region Y for total turnover of €1,000, of which €200 at a 4% VAT rate and €800 at a 22% VAT rate, it follows that 20% of total turnover was obtained by applying 4% VAT while 80% was obtained at the 22% VAT rate.
Assuming the payback amounts to €100, €20 is attributable to the 4% rate, while €80 is attributable to the 22% rate. By deducting the respective VAT from the amounts of €20 and €80 (equal to €0.77 and €14.43, respectively), the VAT to be deducted is obtained, equal to €15.20 for the year 2015.
Regarding the second question, the tax administration confirmed that, in order to exercise the right to VAT deduction, the supplying companies of medical devices are required to issue an internal adjustment credit note pursuant to Article 26, paragraph 2, of Presidential Decree no. 633/1972. The same does not need to be transmitted to the Exchange System (so called “Sistema di Interscambio”), given the lack of subjective identity between the purchasing entity and the territorial entity receiving the repayment.
In particular, the credit note must contain:
- the details of the regional and provincial measures giving rise to the recovery obligation;
- the sequential numbers of the corrected invoices;
- the taxable base and VAT separately for each rate, as provided by Article 21, paragraph 3, of Presidential Decree no. 633/1972.
The credit note must be recorded in order to contribute to the determination of deductible VAT in the relevant periodic settlement (line VP4 with a negative sign) and is reported in line VE25 of the annual VAT return.
Finally, with regard to the last question, it was clarified that the right to VAT deduction arises at the time of payment of the amounts due as payback. The downward adjustment note may be issued no later than the deadline for filing the annual VAT return for the year in which the condition occurred (i.e., the payment).
Specifically:
- for payments made by 9 September 2025, the credit note may be issued by 30 April 2026;
- if issued by 31 December 2025, the VAT is included in the periodic settlement for the relevant month/quarter or in the annual VAT return “VAT Return 2026” (for the year 2025), due by 30 April 2026;
- if issued between 1 January and 30 April 2026, the VAT is included in the monthly/quarterly periodic settlement of issuance and must be reported in the annual VAT return “VAT Return 2027” (for the year 2026), to be filed by 30 April 2027.
These principles apply both to transactions originally invoiced under the ordinary VAT regime and to those subject to the so-called split payment regime pursuant to Article 17-ter of Presidential Decree no. 633/1972.
Concluding remarks
With the reply to legal consultation request no. 7/2026, a significant interpretative gap has been filled regarding the operational methods for recovering VAT connected to the payback mechanism on medical devices.
The VAT calculation method proposed by the Italian tax authorities, although it constitutes an interim method pending communications of VAT amounts from the Regions and Autonomous Provinces, entails a non-negligible administrative burden for supplying companies, which will need to reconstruct, for each year (2015–2018) and for each Region or Autonomous Province, the composition of their turnover broken down by VAT rate, with potential practical difficulties in retrieving the relevant documentation.
Furthermore, for companies that made the reduced 25% payback payment by 9 September 2025, the deadline for issuing the downward adjustment note is set at 30 April 2026. This is a relatively narrow time window which, in the absence of data communicated by the Regions or Autonomous Provinces, requires companies to promptly initiate the activities of reconstructing turnover data and preparing the adjustment notes, in order not to lose the right to VAT deduction.
It is therefore recommended that companies supplying medical devices promptly verify their position with respect to payback payments and initiate without delay the preparatory activities for issuing credit notes, to ensure the full exercise of the right to VAT deduction within the deadlines indicated by the Italian tax authorities.
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