- The Italian tax authorities clarified the deductibility of input VAT for transactions involving the purchase of residential buildings intended for tourist rental as taxable transactions for VAT purposes.
- The applicant, ALFA S.R.L., asked for clarification regarding the deductibility of VAT incurred on the purchase of a residential building intended for tourist rental.
- The Italian tax authorities provided a positive answer, stating that the VAT paid at the time of purchase is deductible in the hands of ALFA, even though the property is classified as residential.
- This is because the property will be used for a real commercial activity, and there is a necessary correlation between the goods and services purchased and the activity carried out.
- The cadastral classification of the property is not relevant in determining its instrumentality for the purpose of production or exchange within the scope of the activity of the company.
Source PwC
Latest Posts in "Italy"
- Italy Requires €50,000 Bank Guarantee for Non-EU Businesses’ VIES VAT Registration
- In 2026, Automatic Low-Risk VAT Refunds with AI to Boost Anti-Fraud Efforts
- Commission Backs Italy’s VAT Derogation on certain vehicles Through 2028
- Briefing Document & Podcast: Italy’s E‑Invoicing, E‑Reporting, and E‑Transport: Scope, Timeline & Key Details
- Standard VAT Rate Applies to Hearing Aid Repairs; Reduced Rate Only for Sales, Not Services
