POSSIBILE DETRARRE IVA PER LE OPERE REALIZZATE SU BENI DI TERZI IN PRESENZA DI UN TITOLO DI POSSESSO IRREGOLARE?

VAT can be deducted for works on third-party assets even in the presence of irregularities in the ownership title of the real estate, provided that it is not a macroscopically uneconomic operation. This is the interpretative guidance recently provided by the Supreme Court, to silence a series of tax disputes promoted following the notification of assessment notices by the Financial Administration.

The Revenue Agency, in fact, in carrying out its control activity, has found itself over the years receiving a plethora of assessment notices aimed at recovering VAT in the presence of renovation and modernization works carried out on properties owned by third parties in the absence of a valid authorization for the execution of the works on the property of others, given the lack of a valid and regular title of possession of the property itself (as in the case of free unregistered loans, as well as rental contracts registered late), with  consequent denial of the related costs incurred, as they are not inherent, and of the possibility of deducting the value added tax paid.

According to a consolidated orientation of the jurisprudence of legitimacy, the evaluation of the value of the title with which the taxpayer finds himself occupying the property subject to the restructuring/modernization activities is left to the judge of merit, as there is no mandatory list relevant for this purpose.

With regard to VAT, the Court of Cassation held that "the right to deduction for renovation or maintenance work on third-party properties must be recognised, provided that there is a nexus of instrumentality with the business or professional activity, even if only potential or prospective, and even if this activity has not actually been carried out due to reasons extraneous to the taxpayer".

Inherence, on the other hand, again according to the Supreme Court "must be evaluated according to a qualitative and not quantitative judgment, related to the undertaking to be carried out".

To recover the deducted VAT, therefore, the Financial Administration must demonstrate the macroscopic uneconomical nature of the operation.