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The Italian government announced a purse of €1bn to be spent on VAT repayments to large businesses. The move comes in response to infraction proceedings by European Commission for Italy’s failure to issue rebates due within reasonable time limits imposed by European law.
Firms owed VAT repayments from Italy should now expect to receive the funds, according to KPMG.
The Italian government announced a purse of €1bn to be spent on VAT repayments to large businesses. The move comes in response to infraction proceedings by European Commission for Italy’s failure to issue rebates due within reasonable time limits imposed by European law.
Firms owed VAT repayments from Italy should now expect to receive the funds, according to KPMG.
The accountancy giant’s UK head of indirect tax, Gary Harley, said, “This is VAT that businesses have paid to suppliers, who in turn have paid to the Italian authorities. The affected firms are due the VAT back in the form of a refund because they are in a net VAT repayment position.
“Taxpayers are currently suffering a significant cash flow penalty through Italy failing to refund VAT receivables for many years. The Italian authorities are not disputing that the refunds are owed, but they impose onerous audit processes and bank guarantee requirements upon taxpayers seeking approval for repayments,” added Harley.
“It seems pressure from the EC will prompt a number of the refunds due, but we would encourage businesses to proactively seek theirs now.”
