European Union Gazettes EC Decision on Italian VAT Deduction Limit for Vehicle Expenses

The European Union Official Gazette Dec. 12 published the European Council (EC) Implementing Decision No. 2025/2529, amending Decision 2007/441/EC to extend Italy’s authorization to derogate from Council Directive 2006/112/EC on the common system of VAT by restricting the input VAT deduction for motorized road vehicles partially used for non-business purposes. The derogation permits Italy to limit the VAT deduction to 40 percent of expenses related to purchases, leases, intra-community acquisitions, imports, repairs, maintenance, and fuel for such vehicles. The decision includes measures: 1) extending Italy’s authorization to Dec. 31, 2028, from Dec. 31, 2025; and 2) requiring Italy to submit ...