The Agenzia delle Entrate (Italian Tax Authority) provides guidance on the correct tax treatment for a simple and monetized sharecropping contract, clarifying the VAT and direct tax implications for the soccidante (owner) and soccidario (caretaker) in the sale of the livestock.
The soccidante (Alfa s.s.) and soccidario (Beta S.r.l.) have entered into a simple sharecropping contract for the fattening of calves. The soccidante owns the livestock and provides the feed and medicines, while the soccidario is responsible for the care and upkeep of the animals. The increase in the value of the livestock is determined at the end of each cycle and divided between the parties.
For VAT purposes, since both the soccidante and soccidario are considered agricultural entrepreneurs, they can apply the special regime under Article 34 of the Decree on VAT for the sale of the livestock. The transfer of the livestock at the beginning and end of the contract is not considered a transfer of ownership and is therefore outside the scope of VAT. The division of the increase in the livestock value is also considered a declarative act and not subject to VAT.
Source: agenziaentrate.gov.it
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
