Edited by Davide Accorsi, Lorenzo Pirola and Francesco Turri
Following the extensions already granted in 2020 and 2023, the application of the split payment regime should be further extended until 30 June 2029, postponing the deadline currently set for 1 July 2026.
This is set out from the proposal for a Council Implementing Decision of the European Union – COM (2026) 281 of the European Commission, published on 17 June 2026. However, the definitive effectiveness of the extension remains subject to approval by the Council of the European Union, which is expected to confirm, within a short timeframe, the position already adopted by the European Commission, although, to date, the matter does not appear to have been formally included on the Council’s agenda.
The approaching deadline of 1 July 2026, in the absence of prior official communications from both Italian and European institutions, had generated uncertainty among the affected economic operators. In particular, given the lack of indications concerning potential extensions, there remained uncertainty as to the applicable framework from 1 July onwards, with the risk that suppliers to public administrations and state-controlled entities would be required to promptly adapt their accounting and invoicing systems.
In this context, the recent publication of the draft implementing decision, issued just over fifteen days before the deadline, now allows for a more optimistic look regarding the possible extension of the split payment mechanism by the EU institutions. The proposal adopted by the European Commission will now be examined by the Council of the European Union, which is responsible for granting final approval of the derogation.
It should be noted that, within the draft implementing decision, the European Commission considered that the abolition of the special regime could lead to a reduction in tax revenues, with significant consequences for public finances. For this reason, the Commission deemed it appropriate to grant a further extension, while emphasizing that Italy should, in parallel, continue to develop conventional instruments to prevent VAT fraud, and, where necessary, introduce new measures.
Accordingly, it is reasonable to expect a favorable opinion from the Council of the European Union and, in the event of a positive outcome, the continued application of the split payment mechanism until 30 June 2029 with respect to Public Administrations and other entities currently within the scope of the regime.
Furthermore, this development was referenced during the Question Time session held on Wednesday, 17 June 2026, before the Finance Committee of the Italian Chamber of Deputies, in the context of parliamentary questions no. 5-05501 and no. 5-05506. Specifically, based on the responses provided, it appears that Italy had already notified the European Commission in October 2025 of its request for an extension, seeking to prolong the regime until December 2029. However, the European Commission proposed a shorter duration, identifying 30 June 2029 as the new deadline.
The European Commission’s preliminary approval of the extension of the split payment mechanism was justified on the grounds that the special regime, also in combination with electronic invoicing, has enabled:
- enhanced security, certainty and timeliness in the collection of tax/VAT revenues;
- increased levels of compliance among economic operators;
- the establishment of an efficient and effective anti-fraud control system.
In light of the above, it appears reasonable that the split payment mechanism may be formally extended until 30 June 2029.
It remains understood that, if approved by the Council of the European Union, such extension should represent the final one of the regime, which is therefore expected to definitively expire on 30 June 2029.
The final decision of the Council of the European Union is therefore awaited.
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