- The Italian Tax Authorities (ITA) have clarified that VAT on transaction costs in merger-leveraged buyout (MLBO) transactions, incurred by special purpose vehicles (SPVs), may be deductible if the costs are linked to the target’s taxable activities.
- Taxpayers can now recover previously non-recoverable VAT incurred in prior MLBO transactions by filing a refund request, rather than a supplementary VAT return, aligning with recent Supreme Court decisions.
- VAT refund claims must be filed by August 9, 2026, and require careful analysis of transaction details, proof of non-deduction, and potential adjustments to corporate income tax treatment.
Source EY
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