Exclusion from VAT of the supply of services carried out free of charge by a taxable person for the use of his staff: a ‘sailor’s promise’ by the legislator? / Il Fisco 28/2024

In ‘il fisco’ No. 28 of 2024, Pierpaolo Maspes and Raffaele Corso observe that the relationship between the provisions governing the right to deduct VAT and the provisions providing for certain services without consideration to be subject to VAT could raise the doubt that the VAT rules applicable to the latter are in some respects ‘misleading’. Indeed, it may happen in practice that the right to deduct the VAT paid in respect of certain expenses incurred in the performance of services without consideration that serve business purposes and are consequently excluded from VAT is disallowed by the tax authorities, thus reintroducing through the window the tax burden that, with the exclusion from VAT, had been taken out of the door. It is argued that such limitations on the right to deduct are unacceptable and that the exclusion from VAT is not, therefore, a ‘sailor’s promise’ on the part of the legislature.

Il Fisco 28 2024