The Italian VAT law restricts the scope of compensation between tax debts and VAT credits under a certain amount for each tax…
C-211/16 Bimotor Spa, of 16 March 2017 Recovery of VAT credit through compensation
The Italian VAT law restricts the scope of compensation between tax debts and VAT credits under a certain amount for each tax period. Such limitation is aimed at the fight against tax evasion. However, the ECJ stated that the neutrality must be ensured making possible for the taxable person to recover the VAT credit, regardless of whether this is done by reimbursement or compensation. Therefore, in the light of the principle of neutrality, whether the VAT credit could be recovered partially via compensation and the amount exceeding the threshold via reimbursement the national law is not breaching the EU law. Furthermore the principle of proportionality requires that the procedure applied to recover the excess of VAT credit is not too complex with the effect to make it impossible to recover it.
C-493/15 Identi, of 16 March 2017
The ECJ settled the interpretation of VAT law in relation to bankruptcy and the recovery of VAT credits by the Treasury. According to the last judgement delivered regarding natural persons VAT can be declared irrecoverable under national legislation after a bankruptcy discharge procedure. This judgment is in line with the previous Italian case C- 546/14 Degano Trasporti which was related to the same situation but for legal persons.
Prof. Paolo Centore
