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Recovery of VAT charged to subjects with deduction limits

  • The response to an inquiry from the Italian Revenue Agency clarifies the issue of VAT reimbursement in cases where the recipient has deduction limits.
  • The right to deduct VAT can be exercised based on the conditions at the time of the original transactions.
  • The deduction percentage applicable at the time of reimbursement cannot be used.
  • The recovery of deductible VAT cannot be done through the annual tax return.
  • The amount can be requested as a refund from the Revenue Agency within two years of the occurrence of the refund condition.
  • The refund condition is considered to be met when the assessment notices from the supplier are finalized, resulting in an incorrect payment of VAT by the recipient.


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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