Claudio Morati 17 November 2023

VAT refund for truffle sales: Court of Cassation decision

Rimborso IVA per la vendita di tartufi: decisione della corte di cassazione

VAT Refund for Truffle Sales: In August 2023, the Court of Cassation issued a judgment of significant importance for those involved in truffle sales. The judgment, numbered 23998/2023, paved the way for VAT refunds on purchases made by amateur and occasional sellers who do not have a VAT number. This article will explore the details of this judgment and its implications.

The Question: The VAT Refund Dilemma

The judgment concerns a case in which a company active in truffle processing and marketing had requested a VAT refund related to truffle purchases from amateur and occasional sellers without a VAT number. Initially, the refund had been denied.

The Court's Decision: A Significant Step

The Court of Cassation considered several relevant factors:

  • Article 1, paragraph 109, of Law no. 311/2004, which provided for the non-deductibility of VAT paid through self-invoices issued by purchasers of truffles from amateur or occasional sellers without a VAT number, was no longer in force for the case in question.
  • The application of a repealed norm to a relationship that had not yet been defined raised doubts about its compatibility with European Union law.
  • The legislative amendment was necessary to avoid an infringement procedure initiated by the European Commission against Italy, as it conflicted with VAT Directive no. 2006/112/CE, which recognizes the right to deduct input VAT.
  • The Court ruled that Article 1, paragraph 109, of Law no. 311/2004 could not be applied as it conflicted with the provisions of Directive 2006/112/CE, which took precedence over national law.

Implication of the legislative amendment

With the entry into force of Article 29 of Law no. 122 of 2016 from January 1, 2017, the obligation of self-invoicing and VAT settlement by the transferee was eliminated. This amendment was necessary due to the EU-Pilot 8123/15/TAXU infringement procedure initiated by the European Commission, which had highlighted the incompatibility between the self-invoicing regime and the provisions of Council Directive No. 112/2006/EC.

The change and the principles of VAT

The regime applicable to the purchase of truffles by amateur or occasional sellers, who are not VAT taxpayers, was influenced by the reverse charge system. However, it did not allow for the right of deduction for the purchaser.

Conclusion

The Court of Cassation's judgment has paved the way for VAT refunds for companies involved in truffle sales by amateur or occasional sellers without a VAT number. This decision reflects the need to comply with European Union law and the fundamental principles of VAT. With the legislative amendment, Italy has eliminated a restriction that went against the principle of VAT neutrality, ensuring taxpayers the right to obtain a refund of taxes paid in violation of Union law.

The Court of Cassation's judgment has important implications for the truffle sector in Italy, opening the way for greater legal certainty and fairer tax treatment for the businesses involved.

 

Source: https://iqnotizie.it/notizia/IQ12760