Edited by Alessia Zanatto, Maria Chiara Turio Bohm, Giulia Fantinato
By means of Ruling no. 427, dated September 11, 2023 (“Ruling No. 427/2023”) the Italian tax authorities provided important clarifications regarding the issuance of credit notes pursuant to Article 26, Presidential Decree No. 633/1972 in the event that the credit claimed by the policyholder/provider has been indemnified by an insurance company with the consequent subrogation pursuant to Article 1916 of the Italian Civil Code.
The petitioner, ALFA, is a company operating in the business of commercial credit insurance and debt collection.
The petitioner provides insurance coverage for receivables, contractually due to the policyholder in the context of its commercial activity. If the relevant conditions are met, the petitioner pays to the policyholder the amount of the trade receivable and the relevant VAT. Consequently, the indemnified claim and all the related rights originally attributed to the policyholder are transferred to ALFA pursuant to Article 1916 of the Italian Civil Code.
In fact, according to Article 1916, paragraph 1, of the Italian Civil Code, ALFA, when paying the indemnity under the insurance policy, the insurance company “is subrogated, up to the amount of the indemnity, to the rights of the policyholder against the liable third parties”.
It frequently happens that the debtors are subject to insolvency proceedings. Sometimes, the policyholder intervenes in the debtor’s insolvency proceedings before ALFA pays the indemnity under the insurance policy and the relevant claim is transferred to ALFA. In other cases, the claim is indemnified and transferred to ALFA pursuant to Article 1916 of the Italian Civil Code before the policyholder intervenes in the debtors’ insolvency proceedings.
In light of the above the applicant requests confirmation from the Italian tax authorities on the possibility of issuing credit notes – pursuant to Article 26 of Presidential Decree No. 633/1972 – with reference to a credit, claimed by the policyholder, in case, after the subrogation provided for in Article 1916 of the Italian Civil Code, the debtor has not paid the amount due following an unsuccessful insolvency procedure. In fact, ALFA claims to have the right to issue the credit note only in the event that, at the time the credit is transferred pursuant to Article 1916 of the Italian Civil Code, the policyholder has not yet intervened in the debtor’s insolvency proceedings.
- Article 26, paragraph 2, Presidential Decree No. 633/1972 provides that “if a transaction for which an invoice has been issued, following the registration pursuant to Articles 23 and 24, ceases in whole or in part, or the taxable amount is reduced, as a result of declaration of nullity, cancellation, revocation, termination, withdrawal and similar or as a consequence of the application of contractually provided rebates or discounts, the seller or provider shall be entitled to deduct, pursuant to Article 19, the tax corresponding to the variation, by recording it in accordance with Article 25”;
- pursuant to Article 26, paragraph 3-bis the credit note may also be issued in the event the recipient fails to pay, in whole or in part, the consideration: a) from the date on which the recipient is subjected to insolvency proceedings, b) due to individual enforcement proceedings that have not been successful.
The Italian tax authorities recalled their guidelines regarding the case of assignment of outstanding receivables. In fact, with Resolution No. 120/E/2009, the Italian tax authorities clarified that, in the case of non-recourse assignment of a receivable already claimed in the context of the debtor’s insolvency proceedings, the right to issue the credit note belongs to the assignor/original creditor. Indeed, as specified by the Italian tax authorities, “despite the fact that the assignment of receivables results, from a civil law standpoint, in the immediate transfer of the receivable to the assignee – who becomes the only party entitled to claim payment from the assigned debtor – … from a tax law standpoint, the assignor is the only party entitled to issue credit notes”. This is also confirmed by the case law of the Italian Supreme Court, stating that “the recovery of VAT by means of credit note pursuant to Article 26 of the Presidential Decree of 26 October 1972, No. 633 requires “the identity between the invoice and the original registration, on one hand, and, the registration of the credit note, on the other hand, thus ensuring a correspondence between the two accounting records” (Italian Supreme Court, judgment no. 9188 of 6 July 2001 and no. 5356 of 2 June 1999)”.
Similarly to the assignment of receivables, also in the case of subrogation by the insurance company, although, from the civil law standpoint, a transfer of the receivable and all the related rights originally attributed to the policyholder occurs, from the tax law standpoint, the policyholder (i.e., the original creditor/provider) is the only party entitled to issue the credit note. In this respect the circumstance that, at the time of the transfer of the claim to the insurance company pursuant to Article 1916 of the Italian Civil Code, the policyholder has not yet intervened in the debtor’s insolvency proceedings is irrelevant.
 This provision was added by Article 18, paragraph 1, letter b), of the Legislative Decree No. 73 of 25 May 2021, converted into law with amendments by Law No. 106 of 23 July 2021.
 In this respect, the conclusions of the Italian tax authorities are consistent with the guidelines expressed by the Court of Justice of the European Union in its judgment in case C-482/2021, (Euler Hermes). In fact, at par. 42, the Court states that “it cannot be held that, in the light of EU VAT law and irrespective of the national rules that may govern assignments of debts under civil law, an insurer such as the applicant in the main proceedings may be identified as being the taxable person entitled, as regards the part of the debts that have been the subject of compensation and assignment, to a reduction of the taxable amount for VAT purposes under Article 90(1) of the VAT Directive”.
 On this point, Ruling No. 427/2023 seems to supersede the clarifications provided with reference to the case of credit assignment by the previous Ruling No. 91/2019. These clarifications had been provided with reference to the provision of Article 26, Presidential Decree No. 633/1972 in force prior to the amendments made by Decree Law No. 73/2021, according to which the credit note could be issued only at the completion of the insolvency procedure, once it had been assessed that the credit could not be recovered.
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