VAT Deduction Allowed for Garage of Professional Office Classified as Residential Property, Supreme Court Rules

• The Italian Supreme Court (Cassazione) confirmed the right to deduct VAT for expenses related to building a garage and paving an external area for a notary office, even if the property is classified as residential.
• This decision continues previous case law, emphasizing that VAT deduction is allowed if the property is objectively used for business activities, regardless of its cadastral classification.
• The right to deduct VAT applies if the taxpayer can prove the property’s actual use for professional or business purposes.
• The principle of VAT neutrality requires that the property be functionally connected to taxable business operations, assessed concretely and prospectively.
• The tax authority’s focus on cadastral classification is overridden by the court’s substantive approach, prioritizing the property’s real use in business activities.

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.

---

---