Higher Income from Financial Investigations Includes VAT, Supreme Court Rules in Line with EU Law

• The higher income determined from financial investigations is considered to include VAT.
• The Italian Supreme Court (Cassazione) ruled that, in cases of unreported business activity discovered through unexplained bank transactions, the reconstructed taxable amount is VAT-inclusive.
• This aligns with European Court of Justice guidance, emphasizing the principle of VAT neutrality.
• Practically, if additional revenue of €122,000 is assessed, it already includes €22,000 VAT and €100,000 taxable base, not subject to further VAT calculation.
• The decision has significant practical consequences, contrasting with previous practices that calculated VAT on top of the assessed amount.

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.

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