- Recent ruling by the Court of Tax Justice in Liguria states that VAT cannot be deducted on legal expenses incurred for the defense of administrators, executives, and employees involved in criminal proceedings.
- The ruling aligns with the prevailing jurisprudential trend.
- The issue pertains to the deductibility of VAT for costs incurred by the company for legal expenses related to crimes committed by administrators and employees.
- According to Article 19 of DPR 633/72 and Article 168 of Directive 2006/112/EC, clients of legal professionals can deduct VAT based on general rules if they act in the course of their business activities.
- However, the court ruled that legal expenses incurred for the defense of individuals involved in criminal proceedings do not meet the requirement of relevance to the company’s business activities.
- Therefore, VAT cannot be deducted on such expenses.
Source: eutekne.info
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
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