The European Court of Justice ruled that Italian legislation providing a 60% VAT reduction for taxpayers affected by the 2009 Abruzzo earthquake is incompatible with EU VAT law and the principle of fiscal neutrality. It wasn’t a reduction in the VAT rate itself, but rather a reduction in the total amount of suspended VAT that affected taxpayers were required to pay when collection resumed. The standard VAT rate remained the same, but taxpayers were allowed to pay only 40% of the total VAT amount they would have normally owed for that period. The Court reasoned that this reduction allows affected taxpayers to keep or recover a significant portion of VAT paid by final consumers, creating unequal treatment compared to other Italian taxpayers and violating the obligation of Member States to ensure collection of all VAT due on their territory.
Source: curia.europa.eu
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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