- The Italian Supreme Court ruled that VAT deduction can be denied if the buyer knew or should have known that the VAT charged was not paid by the seller.
- This applies even if there is no actual tax fraud, but indications of tax evasion.
- In the case discussed, the seller’s company was linked to the buyer’s family and repeatedly failed to pay VAT.
- Normally, the buyer is not responsible for the seller’s unpaid VAT, but exceptions exist if there are strong indications of the buyer’s awareness of the unpaid VAT.
- The principle of neutrality in VAT is compromised if the buyer is aware of the seller’s non-payment.
- The tax authority must prove the buyer’s involvement in evasion through qualified presumptions, subject to strict judicial review.
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.
Latest Posts in "Italy"
- ECJ C-527/24 (Harry and Associés) – Judgment – Technical Fault Cannot Bar VAT Refund and Access
- Non-Resident Professional: VAT and Income Tax on Amounts Received After Company Deregistration
- VAT on Professional Fees from a Dissolved Company Despite VAT Closure and Relocation Abroad
- Italy’s Plastic Tax and Carbon Pricing: New Environmental Levies and Compliance for Businesses
- VAT Compliance Certificate Remains Valid Even Without Required Checks, Rules Italian Supreme Court
