Limits to the right of VAT deduction in the case of late ‘viewing’ of electronic purchase invoices

Edited by Andrea Werner Beilin and Maria Rende

With the Ruling reply no. 435/2023, the Italian tax authorities provided clarifications on the VAT deduction in the case of late “downloading” of electronic invoices sent by the Interchange data system of the Italian tax authorities (“SdI”) into the so called “put on disposal” area of the tax portal “Fatture&Corrispettivi”.

In this respect, the taxpayer referred that he received courtesy invoices from suppliers in 2021, but he discovered in 2022 that the relevant electronic invoices were delivered by the SdI in the above tax portal area, due to the missing registration of the receiving e-invoicing channel.

Moreover, the taxpayer specified that “considering that he had never downloaded and registered the concerned e-invoices in the years 2021 and 2022, he did not include the above transactions in the annual VAT return related to 2022 (year 2021)”.

Having said the above, the taxpayer asked if it is possible to deduct the relevant VAT from the day in which the latter download the e-invoices from the tax portal (in this case, in 2023).

In this respect, the Italian tax authorities, after analyzing the EU and national principles, according to which the right of VAT deduction is subject to the existence of both the substantive requirement (i.e., the tax point) and the formal one (the disposal of a valid purchase invoice), attributed strong relevance to the taxpayer’s omissive behavior, which was guilty of remaining inactive in 2021 and 2022 and, accordingly, postponed the ”dies a quo” for the exercise of the right of VAT deduction.

In particular, the Italian tax authorities clarified that, in this case, it is not possible to deduct VAT either in the years 2021 and 2022, considering that the electronic invoices were timely received, or in 2023 due to the taxpayer’s omissive conduct.

The tax authorities position seems against the general principles of VAT neutrality, since, in the specific circumstance, it effectively denies the taxpayer right to deduct VAT. Moreover, this interpretation seems contrary to the Italian tax authorities Act no. 89757 of April 30, 2018, according to which, for invoices “put on disposal” the date of receipt of the invoice (and therefore the moment from which is possible to exercise the right of VAT deduction) is the date of its downloading from the tax portal.

For a deeper discussion, please contact:

Andrea Werner Beilin

PwC TLS Avvocati e Commercialisti