VAT treatment of the “Sale and sale back” – decision no. 30016/2021 of the Italian Supreme Court

Prepared by Alessia Zanatto, Francesco Pizzo and Stefania Lolli

With the recent decision no. 30016 dated October 26, 2021, the Italian Supreme Court ruled about on the VAT treatment of the “sale and sale back”.

In brief the case regards a taxpayer which performed a “sale and sale back” transaction, concerning the sale of the farming instrument and the subsequential repurchase of the latter benefitting from installments payment, in order to get the cash necessary for its business activity.  

With a tax assessment act, the Italian tax authorities deemed that the above-mentioned transaction has been performed for the sole purpose of fraudulently meeting the requirements necessary to benefit from “Sabatini Law” funding. Consequently, they challenged input VAT unduly deducted on the purchase of the goods previously supplied, considering the non-existing the purchase, to which the VAT deduction related to.

On the matter a tax litigation started which was brought before the Italian Supreme Court.

In the decision at stake, the judges stated that no taxable supply arises from the “sale and sale back” for the reasons briefly summarized below.

First of all, the Supreme Court recalls the notion of supply of goods provided by the Court of Justice of the European Union (CJEU) reference to the “sale and lease back” (i.e. case Mydibel, C-201/18). The notion of supply of goods “does not refer to the transfer of the legal title provided for by the national law but to any transfer, from one part to another, of the right to dispose of tangible property as owner”.

In addition to the above, the Italian Supreme Court, in the decision 30016, refers to the same notion of supply of goods in the “sale and lease back” provided in its decision no. 18239 dated June 24, 2021 (on this matter, please refer also to our previous newsalert dated May 21, 2021).

Moreover, the Supreme Court stated that a different conclusion would not be reached even if the supply at stake was to be deemed a supply of services. In fact, the financial cause would imply a supply in the scope of VAT though VAT exempt with no right to deduction according to article 10, paragraph 1, no. 1 of Presidential Decree no. 633/1972.

Let’s Talk

For a deeper discussion, please contact:

Alessia Angela Zanatto

PwC TLS Avvocati e Commercialisti


Francesco Pizzo

PwC TLS Avvocati e Commercialisti