The Italian Government has set aside €1bn for VAT repayments to large businesses in response to EC infraction proceedings for its failure to repay VAT rebates due within reasonable time limits imposed by European law. The Italian announcement is available here (in Italian).
According to KPMG in the UK (which has been pursuing these rebates on behalf of clients) this latest move means that businesses owed VAT rebates from Italy should now expect to receive the funds they are due. KPMG has a small group of clients who, collectively, are due almost €500m and believes that several billion Euros are likely to be owing, meaning that this fund is likely to be just the first step in paying back all that is due.
Commenting on the Italian Government’s announcement, Gary Harley, Head of Indirect Tax at KPMG in the UK, said: “Following the European Commission’s announcement last month that it is to launch infraction proceedings against the Italian government for its habitual failure to repay legitimate VAT refunds due to businesses, it appears that the Italian government are seeking to appease the Commission by setting aside funds to meet these obligations.
This appears to be the first tangible effect of a complaint that KPMG in the UK brought to the Commission on behalf of a small group of multi-national companies who, collectively, are owed almost €500m in VAT refunds. Other taxpayers are likely to be in similar positions so, collectively, there is likely to be several billion Euros owing.
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