- The right to VAT deduction applies even for purchases made by a taxable person that do not correspond to the realization of active transactions
- This holds true even if the taxable person who made the purchases for the purpose of conducting an economic activity decides to cease the business due to it being uneconomical
- The principles were established by the Cassazione ruling no 30685 filed on November 28, 2024, which confirmed and expanded its conviction on the matter
- In the examined case, a company made a series of investments at the start of its activity aimed at setting up photovoltaic plants which allowed the company to deduct the VAT paid on the purchases made
- A drastic reduction in incentive tariffs in the photovoltaic sector made the planned activity uneconomical leading the company to decide not to continue and to cease the business resulting in deregistration from the Business Register
- Meanwhile, the company, in the absence of downstream operations, had requested a refund of the VAT paid on purchases made preparatory to the activity
- The Financial Administration noted that the company did not have an autonomous organization compared to its controlling entity, had not conducted a business activity, and did not even have the potential aptitude to conduct one, leading to the suspension of the refund execution as the right to deduction was denied
- However, the Cassazione recognized its legitimacy based on established community and national jurisprudence
- Although the VAT taxable person had not carried out active transactions, the intention to independently start an economic activity was supported by objective elements
- The initial costs related to investments, in anticipation of operations to be carried out, establish the right to deduct VAT immediately according to the Supreme Court, without having to wait for the actual start of the business operations
- The decision references a previous judgment by the court reinforcing this position
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.
