The document discusses various provisions of Italian tax law related to VAT deductions and adjustments. It references Article 19 of Legislative Decree No. 633 of 1972, which outlines the deduction of VAT for items used in both taxable and non-taxable operations. It emphasizes that the right to deduct VAT arises when the tax becomes due and should be exercised by the declaration of the year in which the right to deduction arose. It also clarifies that VAT related to exempt or non-taxable operations cannot be deducted, except as provided by Article 19-bis2.
For items partially used for non-taxable operations, the deduction is allowed only for the portion attributable to taxable operations. The determination of deductible and non-deductible amounts is based on objective criteria.
Regarding non-commercial entities like municipalities, the document specifies that VAT deduction is allowed for purchases related to commercial activities conducted with separate accounting from other activities, subject to certain conditions.
The article explains the process of adjusting VAT deductions for non-amortizable goods and services used differently than initially assumed. The adjustments for depreciable assets are calculated based on their utilization within the year of operation or the subsequent four years.
The document also discusses the concept of integrative declarations, which allow for modifications to already submitted annual declarations to correct errors or omissions.
In the specific case discussed in the document, a municipality utilizes a property for both commercial and institutional activities. The VAT deduction is analyzed based on the property’s use and categorization. The document clarifies that VAT deduction rights only arise when the property is used for commercial purposes.
Starting in 2023, due to changes in the property’s usage, the municipality is allowed to proportionally recover VAT associated with commercial activities, following the rules outlined in Article 19 and 19-bis2.
The conclusions provided are based on the information and documents provided by the municipality, with the understanding that they are accurate and implemented as described in the inquiry. The tax authorities retain the right to review and scrutinize the information.
Source: agenziaentrate.gov.it
