- During the startup phase, a company can deduct VAT on purchases made in preparation for its activity even if no active operations have yet been recorded
- A recent court ruling emphasizes that such purchases must be functional to the planned economic initiative in view of subsequent implementation
- For VAT deductibility on purchases of goods and passive operations, it is necessary to verify their actual relevance to the business purposes
- The deduction of the tax can also apply in the absence of active operations, regarding preparatory activities, as long as the acquired good or service is necessary for the organization of the company or functional to the planned economic initiative
- The Court of Cassation has clarified several important aspects regarding the relevance of purchases of goods or services in the case of preparatory activities for a future economic initiative
- In a specific case, a company, being the sole shareholder of five separate companies involved in renewable energy production which later ceased, challenged several tax assessments for the tax years 2011 and 2012
- The tax authority denied the right to deduct VAT on purchases because the ceased companies had not conducted any active operations during their period of activity
Source: commercialistatelematico.com
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.
