- Litigation finance, or third-party litigation funding (TPLF), involves a third party financing a party’s legal costs in return for a share of any proceeds
- TPLF agreements are considered ‘atypical’ contracts in Italy’s legal system
- The tax ramifications of TPLF agreements, specifically concerning VAT, are complex and require a case-by-case analysis
- The European Parliament Research Service highlighted uncertainty regarding the application of VAT rules to dispute financing services
- The question of the VAT regime applicable to dispute financing services within TPLF agreements has been addressed to the Italian tax authorities for the first time.
Source: internationaltaxreview.com
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.
