VAT Deduction for Third-Party Goods Imports: Italian Tax Authorities’ Clarifications and Remaining Uncertainties

Italian tax authorities confirmed importers can deduct VAT paid at customs on third-party goods.
This applies even when importers process goods on behalf of third parties.
The case involves a company, Alfa, processing and marketing pharmaceutical products in Italy.
Alfa imports a production factor from China, owned by a Japanese company, Beta.
Alfa engages a third party, Gamma, for processing and sells the final product to Beta.
The product is shipped from Italy to Germany or outside the EU.
The ownership of the production factor remains with the Japanese client, transferred to Alfa free of charge.
It is unclear if the invoiced amount to Beta includes the cost of the production factor.
EU case law requires a direct link between input and output transactions for VAT deduction.
VAT deduction is possible even without a direct link if costs are part of general business expenses.
Italian tax authorities align with previous guidelines on VAT deduction rights.

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.