- Italy’s Revenue Agency (Resolution No. 7/2026) clarifies that an MLBO SPV can qualify as a VAT taxable person and deduct input VAT on transaction costs if those costs are directly linked to future taxable business activity.
- The Resolution moves away from treating the SPV as a mere static holding company and instead views the MLBO as a unified process: SPV setup, share acquisition, and merger.
- Following CJEU case law (notably Sonaecom), preparatory expenses can support VAT deductibility when there is objective evidence of an intention to carry out taxable transactions.
- Legal, financial, due diligence, tax, and notarial costs are treated as preparatory expenses of the post-merger business, making VAT deductible if the merger and continuation of the target’s activity are genuine.
- Deduction is denied if the MLBO is only nominal or the SPV remains a passive holding entity without real taxable economic activity.
Source: ggi.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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