Italian tax authorities clarified the scope of the “frequent exporter” regime does not apply to purchases of immovable property.
Under Italy’s “frequent exporter” regime, qualifying companies may purchase supplies of goods and services under a VAT suspension mechanism, up to the volume of exports that were made in the previous calendar year. This ceiling is known as the plafond.
Now, the Italian tax authorities have clarified that use of this plafond does not apply to purchases of immovable property and related installation services subject to the reverse charge mechanism.
Processing VAT recovery claims in Italy, is known to be a lengthy procedure. Therefore, utilising this scheme, which removes the need for companies to pay VAT on their supplies, may significantly improve their VAT credit position.