The reduction from 100% to 30% of the penalty for undue VAT deduction is considered legitimate. In a recent judgment on September 12, 2023, the Italian Supreme Court established a precedent that goes beyond a previous ruling from September 28, 2018, which merely deferred to lower courts to determine the penalty’s applicability and proportionality. The case involved circular energy sales within the same group of companies, where they bought and sold electricity at the same price, resulting in no actual tax loss. The tax authority contested the undue deduction penalty, which is now 90%, and the court upheld the reduction to 30%, emphasizing the principle of proportionality in VAT sanctions.
Source: eutekne.info
