- Supreme Court Decision: The Italian Supreme Court ruled that the VAT exemption regime for “usual exporters” under Presidential Decree no. 633/1972 can only be applied if suppliers can prove the recipient’s right to fully deduct VAT, particularly for goods where VAT is not fully deductible, such as motor vehicles.
- Restrictions on VAT Plafond Use: The ruling clarifies that the VAT plafond cannot be utilized for purchases of goods and services with non-deductible VAT, emphasizing that suppliers must verify the conditions for VAT exemption before issuing invoices to avoid penalties and tax liabilities.
- Implications for Suppliers: Suppliers must enhance their verification processes to ensure compliance with the VAT exemption regime, particularly for transactions involving goods with objective non-deductibility. The ruling suggests a need for clearer guidance from tax authorities to alleviate the administrative burden on suppliers.
Source PwC
