Is VAT eligible for the Programme, if the total cost of the operation is lower than 5M€, for all partners, including private entities that can recover VAT on the basis of their national legislation?

Yes, In the framework of Interreg Euro-MED projects with a total cost of less than EUR 5 000 000 (including VAT), VAT is eligible as part of project expenditure and all partners can foresee their expenditure with VAT, as referred by the Interreg Programme Manual. More information can be found in the Article 64 of Regulation (EU) No 2021/1060, Non-eligible costs