Italian Supreme Court Overturns Ruling on VAT Credit for Inactive Hotel Due to Seizure

• The Italian Supreme Court referenced EU Court of Justice principles on the relationship between shell company regulations and VAT principles.
• The EU Court stated that not meeting predetermined revenue thresholds should not automatically affect the right to VAT deduction.
• The case involved a hotel company unable to meet revenue thresholds due to a property seizure.
• The company requested exemption from shell company rules and a VAT refund, which was denied by the tax authority.
• The second-level court ruled in favor of the tax authority, citing lack of evidence for the company’s failure to meet revenue thresholds.
• The Supreme Court overturned this decision, noting the need to assess whether the company conducted economic activity.
• The case is sent back to the lower court to determine if the company had economic activity justifying VAT deduction and refund.

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.