Italy Tax Agency Clarifies Group VAT Settlement

The Italian Revenue Agency May 21 issued Answer No. 111/2024, clarifying group VAT settlement. In 2005, the taxpayer initiated the group VAT payment procedure as the parent company of a VAT group. The taxpayer participated in a new VAT liquidation group beginning in 2017. The taxpayer sought clarification on the recovery method for a VAT credit attributable to 2004. The Tax Agency clarified that: 1) as of 2008, companies participating in a group’s VAT settlement aren’t allowed to include their surplus in the compensatory calculations for VAT credits from the previous tax period; and 2) the 2004 VAT credit can ...