EU Proposes Italy Extend 40% VAT Deduction Limit on Business Vehicles Until End of 2028

• The European Commission proposed allowing Italy to extend a VAT deduction limit on certain motor vehicles to 31 December 2028.
• VAT deduction for purchase and related expenses of these vehicles is limited to 40% if not used exclusively for business.
• The 40% limit also applies to assembly, leasing, repairs, maintenance, and related costs.
• Italy cannot tax private use of these vehicles if the VAT deduction is already limited.
• The extension is justified by difficulty distinguishing business and private use; Italy must reapply before 31 March 2028 to continue after 2028.

Source: asd-int.com

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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