Italy’s Revenue Agency confirms 10% VAT applies to waste collection and educational building construction, while TARI management and separate design services remain at the standard rate.
Italy’s Revenue Agency issued two rulings on 11 December 2025 to clarify when the reduced 10% VAT rate may be applied in the areas of municipal waste services and construction of buildings used for educational purposes.
Waste-Management Services and TARI Administration
In Ruling No. 310, the Agency confirmed that only operational waste-management activities such as collection, transport, disposal, and recovery qualify for the 10% reduced VAT rate.
Administrative functions tied to the municipal waste tax (TARI), including billing, tax management, and user-facing services, are not covered by the reduced rate. Instead, they are treated as standalone administrative activities subject to the standard VAT rate.
The decision emphasises that even if a municipality enters into a single contract that bundles waste-management and TARI-related services, the VAT treatment remains distinct. ARERA’s tariff rules and the integrated management perimeter under MTR2 do not affect VAT classification.
If a single price covers services with different VAT rates, the higher (standard) rate prevails unless fees are separately identified. The Agency also rejected the argument that TARI management is ancillary to waste collection, noting that it is an independent activity aimed at administering taxpayer obligations rather than enabling waste-management operations.
Construction of Buildings for Educational and Training Purposes
Ruling No. 309 addresses the VAT treatment of construction and design services for buildings used for teaching and training. The Agency confirmed that buildings structurally intended for educational or other collective purposes may be assimilated to non-luxury residential properties, allowing the construction services performed under a works contract to benefit from the 10% reduced VAT rate.
For mixed-use buildings—such as those used for both research and training—the reduced rate applies only if the educational function is genuine and not merely incidental. This interpretation builds on longstanding legislative references and administrative practice recognising school buildings and similar facilities (e.g., hospitals, barracks, nurseries, charitable institutions) as eligible for the reduced rate when they serve collective needs.
Design services may also qualify for the 10% rate, but only if they form part of the same overall construction contract; if contracted separately, they are subject to the standard VAT rate.
