The Italian Supreme Court has asked the Court of Justice to rule in a preliminary way on the compatibility of this provision with Community law. The question was whether the distinction between the secondment of staff (outside the scope of VAT) and other opportunities for the provision of labour (under VAT) was contrary to the principle of tax neutrality. Noting that there is a direct link between the service provided (detached) and the consideration received (payment to Avir), the Court found that this transaction constituted a service within the scope of VAT. On this basis, the European Court of Justice concluded that Italian legislation violated the EUROPEAN VAT Directive. There are some exceptions for which staff coverage does not go within the scope of VAT. These include secondments between: there is an offer of staff when one party makes its employees available to another party – usually by secondment of the worker – for a fee. The consideration for such a benefit does not necessarily have to be a royalty, but may represent a burden on the employer for the other part of the wages, national insurance and similar labour costs incurred while the employee is seconded. There may also be a reflection when these fees are paid directly by the other party to the employee, HMRC, etc. – see the section below on a statement of behaviour that, in these circumstances, concession treatment applies to certain staff detachments. The ECJ held that Article 2, paragraph 1, under c) of the main VAT Directive should be interpreted as obstructing a national regulation under which the loan or secondment of staff paid by the subsidiary to the parent company to its subsidiary, which is carried out only for the reimbursement of related costs, is negligible for VAT purposes. , “provided that the sums paid by the subsidiary to the parent company are negligible for VAT. , on the one hand, and that the loans or secondments are interdependent on the other.
Finally, it should not be overlooked that, when the Court of Justice decides that the reimbursement of the costs incurred by the main employer for seconded staff is fully taxable for VAT purposes, there is a clear discrepancy with the treatment of the staff rental contract, for which it is expressly provided that the reimbursement of the staff costs incurred by the supplier is excluded from the taxable base. This means that VAT only applies to the levy levied by the supplier. In short, the different types of staff detachment – even if they are similar – will be subject to a different VAT treatment.