Italy Tax Agency Clarifies Input VAT Deductibility for SPV Transaction Costs in Merger Leveraged Buyouts

The Italian Revenue Agency Feb. 12 issued Resolution No. 7/2026, clarifying the ability of special purpose vehicles (SPVs) to deduct input VAT for transaction costs in merger leveraged buyouts (MLBOs). The Tax Agency clarified that: 1) to be able to deduct input VAT, a taxpayer must qualify as a taxable person, and the goods and services purchased must be used for taxable economic activities; 2) holding companies that merely own shares without participating in management can’t deduct input VAT, because they don’t qualify as taxable persons for VAT; 3) holding companies carrying out the role of SPVs for MLBO transactions ...