Tax reform delegation – Pro-rata obligation is skipped

• The changes in value added tax aim to align internal legislation with that of the European Union and simplify the discipline.
• Article 7 of the fiscal delegation outlines guiding principles for revising VAT legislation, including redefining tax assumptions, reviewing exempt operations, rationalizing VAT rates, modifying deductions, and addressing VAT group, third sector, and art import issues.
• The lack of homogeneity between EU and internal legal systems requires adjustments to assumptions of the tax.
• Exempt transactions need clearer definitions in line with EU guidelines.
• The real estate sector requires simplified legislation, and VAT rates need review to align with those in other member states.
• Deductions will see innovations, including an option for pro-rata deductibility for mixed-use goods and services.
• The criteria for deducting VAT on buildings will be updated, and the right to deduction can be exercised at the latest with the declaration relating to the year in which the invoice is received.

Source Fiscooggi

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