- VAT refunds on improvements to third-party property are allowed only if the asset is functionally linked to the taxpayer’s business activity.
- The Italian Supreme Court and the tax authority have clarified that “depreciable goods” for VAT purposes must be read broadly, using the EU concept of “investment goods,” not the narrower income-tax or accounting rules.
- This interpretation includes assets merely available for long-term use, such as under lease or loan agreements, even if not owned by the taxpayer.
- The key requirement remains “inherence”/instrumentality: there must be a connection between the property and the business, even if only potential or future.
- Whether that connection exists is a factual matter to be assessed case by case.
Source: eutekne.info
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.
