The Supreme Court’s Joint Divisions will evaluate whether it is allowed to refund the paid VAT for interventions on properties owned by third parties but held by the taxpayer. The Court has received conflicting opinions on the matter and has referred the case to the President for consideration of submitting the question to the Joint Divisions.Previously, in a different ruling, the Court recognized the right to deduct VAT paid for maintenance or renovation works on third-party properties if there is a direct connection to the taxpayer’s business or professional activity.Now, the question to be examined is whether, in cases where VAT is deductible, the conditions for the right to a refund are also met. The Court has only allowed refunds in certain situations, and the differing opinions are based on the principle of VAT neutrality and the restrictive nature of refund provisions.According to the Court, the right to deduct VAT is based on the direct and immediate connection between the costs incurred and the taxpayer’s economic activities, regardless of legal ownership. However, the right to a refund is not automatically granted based on the right to deduct VAT.Specific provisions and criteria established by national legislators need to be considered for accessing the refund, which may differ from those for deduction. The specific conditions for accessing the refund are governed by Directive 2006/112/EC.The Italian Revenue Agency has generally taken a restrictive stance on refund cases, particularly regarding works on third-party properties that are inseparable or non-removable.Overall, the matter requires a definitive resolution, as even the Supreme Court has not reached a uniform position on the eligibility for refunds in this particular case, both before and after the ruling on deduction by the Joint Divisions.
Source: eutekne.info
