The Revenue Agency denied the deductibility, for IRES and IRAP purposes, of the cost of VAT which had become non-deductible following judieial coneiliation agreements ( Article 48 of Legislative Decree no. 546/92). The cost corresponding to the VAT which has become non-deductible and paid by the company to the tax authorities in execution of the conciliation agreements does not give rise to fiscally relevant income components as there are components that do not represent a productive factor of the taxpayer’s activity.
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