- Recent case law has clarified criteria for assessing the right to VAT deduction in cases of subjectively non-existent transactions, specifying the burden of proof and taxpayer obligations.
- A subjectively non-existent invoice occurs when the transaction is real, but the invoiced party is not the actual supplier or service provider; often, a “paper company” is used as an intermediary.
- This distinction affects VAT deduction rights, cost deductibility, and can lead to sanctions or criminal liability, making it a key focus in tax audits.
- The main difference from objectively non-existent transactions is that, in the latter, the transaction never occurred, while in the former, the transaction occurred but is attributed to the wrong party.
- In subjectively non-existent transactions, the taxpayer’s awareness and due diligence are central to determining liability, as highlighted in recent jurisprudence.
Source: ayming.it
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"
- VAT Credit Assignment Effective Upon Notification to Public Administration, Rules Italian Supreme Court
- Short-term Rentals: VAT Obligations Triggered for Individuals Renting Out Three or More Properties
- Late VAT Return 2026: Submission Deadline and Penalties Explained
- VAT Data Filed with Companies Register Bind the Tax Authority, Supreme Court Rules
- Short-Term Rental of Three or More Properties Triggers VAT and Electronic Reporting Duties
