Italy Tax Agency Clarifies Treatment of Excess VAT Credits Accrued by VAT Group

The Italian Revenue Agency March 30 issued Letter No. 88/2026, clarifying the treatment of excess VAT credits accrued by a VAT group. The taxpayer, a company that was the representative of a VAT group and a tax-consolidating entity, generated a VAT credit due to substantial investments and extensive zero-rated supplies. The taxpayer sought clarification on how the excess VAT credit resulting from the annual VAT return could be used, in addition to a refund request. Upon review, the Tax Agency clarified that: 1) the VAT group constituted a single autonomous taxable entity, distinct from individual members; 2) VAT credits accrued ...