In Italy, the VAT deduction is allowed on the purchase or importation of fuel and lubricants destined for aircraft, pleasure boats and road motor vehicles to the same extent in which VAT deduction is allowed for the purchase or importation of said means of transport.
The VAT may be fully deducted, when the abovementioned vehicles form part of the activity of the company, agents or business representatives.
In contrast, a 40 per cent VAT deduction is allowed on purchase or importation of land motor vehicles, if the vehicles are not exclusively used for carrying out business, trade or professions.
Considering these provisions, Italian Tax Administration argued that this limitation does not affect transactions carried out for contracts where commission is payable on fuel sales, if specific requirements are met.
Source Italian Tax Administration – Letter ruling No. 473 of the 12 July 2021 (in Italian)
Contributed by Fausto Capello
Gianni & Origoni
