Italian Supreme Court Rules on VAT Deduction for Proposed Business Activities in Ordinance No. 15638/2025

• The Cassazione evaluated the nature of services proposed by the taxpayer.
• Ordinance n. 15638 of June 12, 2025, addressed conditions for exercising the right to VAT deduction for a proposed but not yet exercised business activity involving exempt operations.
• A company made purchases for its future activities like securities placement and investment consulting, claiming VAT deduction and requesting a refund.
• The taxpayer’s decision was based on jurisprudence recognizing the right to deduct VAT for activities not yet started.
• Jurisprudence states that preparatory operations should be considered for VAT deduction, even if they occur before revenue generation.
• The taxpayer must prove the relevance of purchased goods and services to future revenue production.
• Purchases necessary for starting business activities are considered relevant for VAT deduction.
• The right to deduction is allowed if the purchased goods or services are necessary for business organization or economic initiative, even if not immediately used.
• The tax authority supports the principle of VAT neutrality, allowing deduction for future business activities even without active operations.
• The case in ordinance n. 15638/2025 involved proposed exempt operations, and the Cassazione ruled that the right to deduction could not be invoked.

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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