The Italian Supreme Court requested a preliminary ruling from the European Union Court of Justice in order to establish whether national law on VAT adjustments (i.e. article 26, paragraph 2, of DPR 633/1972) is compatible with EU law…
Italy – Preliminary ruling on bad debt relief and VAT adjustment – C-202/15 H3G
The Italian Supreme Court requested a preliminary ruling from the European Union Court of Justice in order to establish whether national law on VAT adjustments (i.e. article 26, paragraph 2, of DPR 633/1972) is compatible with EU law.
The national law, implementing articles 90, para 2 and 273 of VAT Directive, requires as a condition for the VAT adjustment in case of non-payment by the client that the supplier has carried out any bankruptcy proceeding or enforcement without success. Actually the reduction of taxable base and amend the related deduction is allowed only if there is no legal possibility to obtain the payment. Such measure, in our view, breaches the principle of neutrality and proportionality in the VAT system.
Prof. Paolo Centore
