Virtual Power Purchase Agreements and Their VAT Treatment: A Complex Legal and Tax Framework

Power Purchase Agreements (PPAs) have become an increasingly important instrument in the energy market, particularly as companies seek to manage their electricity costs and sustainability commitments. While these agreements have evolved into various forms, virtual PPAs present unique challenges from a tax perspective, particularly with respect to their VAT treatment. In this article, the authors examine the complex legal and tax framework surrounding virtual PPAs, with a specific focus on recent developments in the Italian context.