Italy: Authorization to Italian VAT treatment for business vehicles and personal use

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The European Council agreed to Italy’s proposal on the authorization regarding the Italian VAT treatment for business vehicles and personal use. Decision No. COM (2022) 519 amends Decision 2007/441/EC applicable to measures derogating from Articles 26(1)(a) and 168 of Directive 2006/112/EC on the common system of Value Added Tax.


Council Decision No. COM (2022) 519 authorizes:


  • Limiting the input VAT deductions of expenditures incurred to motorized road vehicles not wholly used for business purposes to 40% and
  • Exempting motor vehicles used for private purposes that are subject to restrictions from the duty to account for VAT


To assess the authorization’s effectiveness and the suitability of the percentage restriction applied to the right to deduct VAT, the mandate will be in effect until 31 December 2025.



Source: europa.eu

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