Prepared by Francesco Pizzo, Annarita Terrone, Noemi Tozza
With the Response to the Ruling no. 485, published on October 3, 2022, the Italian Tax Authorities provide futher clarifications about the VAT recovery in case of omitted payment of the consideration by the client subject to insolvency procedures.
From a regulatory perspective, as anticipated in our previous newsalerts, the Article 26, paragraph 3-bis of Presidential Decree n. 633/1972 provides the possibility to issue credit notes, starting from the date of when the assignee/purchaser is subject to an insolvency procedure, in case of the omitted payment of the consideration.
Unlike what was envisaged by the previous law, it is not required that the supplier waits for the unsuccessful outcome of the insolvency procedure to issue said credit note.
This approach has been also clarified by the Circular Letter no. 20/E, released by the Italian Tax Authorities on December 29, 2021, through which it was clarified that the missing filing of claims in insolvency procedures for the credit from the supplier does not preclude this latter from the possibility of issuing the credit note to proceed with the VAT recovery.
With the Response to the Ruling no. 485, published on October 3, 2022, the Italian Tax Authorities clarify that the exercise of the right to the deduction of VAT could take place also in case of the missing filing of claims in insolvency proceedings and in absence of acceptance from the insolvency administrator, since the article 26, paragraph 5 of the Presidential Decree n. 633/1972 exempts this latter from the obligation to register the credit note and to pay the relevant VAT due.
Finally, it is clarified that if the supplier does not issue the credit note at the date in which the insolvency procedure is opened, opting for the filing of claims in the insolvency procedure, this approach does not prejudice to the possibility of recovering VAT, according to Article 26, paragraph 2, of Presidential Decree n. 633/1972, at the end of the procedure if this latter results unsuccessful.
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