Effective from 5 October 2026, the Italian government’s Omnibus Decree (Decreto Omnibus) has significantly extended the time limits for exercising VAT deduction rights and registering purchase invoices. Previously, taxpayers had to claim input VAT deduction by the VAT return for the year in which the right arose (typically the year of invoice receipt) and register purchase invoices by the same deadline. The new rules allow deduction to be claimed by the VAT return relating to the second year following the year in which the right arose, and purchase invoices can be registered by the deadline for the VAT return of that second subsequent year. This two-year extension applies to all taxable persons, providing a substantial compliance buffer for businesses dealing with delayed invoicing, complex supply chains, or administrative backlogs.
Key Takeaways
- Extended Deduction Window: The right to deduct input VAT, which arises when the invoice is received and recorded, can now be exercised up to the annual VAT declaration for the second year after the year of entitlement. For example, an invoice received in January 2026 (right arises in 2026) can be deducted in the 2028 annual VAT return (due April 2029). This aligns Italy more closely with the EU VAT Directive’s minimum standards.
- Purchase Invoice Registration Deadline Alignment: The registration of purchase invoices in the purchase register (registro degli acquisti) follows the same extended timeline. This eliminates the previous risk of losing deduction rights due to late registration, a common issue during year-end closing periods. However, the invoice must still be recorded before the extended deadline; failure to do so results in permanent loss of the deduction.
- Transitional Provisions and Practical Impact: The decree includes transitional rules for invoices received before the effective date. Taxpayers with pending deductions from 2024 and 2025 should assess whether the new deadlines revive previously lost rights. The extension also affects the statute of limitations for VAT assessments, giving the tax authority more time to audit. Businesses should update their VAT compliance calendars and ERP system settings accordingly.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement