The Italian Tax Authorities (“ITA”) have published Ruling Answer No. 402 of 9 October 2019 (https://bit.ly/2BVT4NQ) providing clarifications on the conditions to be met to transfer a VAT credit position in the case of a contribution of going concern.

In the case at hand, a taxable person accrued a yearly VAT credit in 2018 and another VAT credit in a part of 2019. In such a scenario, this latter intended to transfer such VAT credit to a newly incorporated company within the framework of a contribution of going concern.

The ITA clarified that under Article 16(11)(a) of Law No. 537 of 24 December 1993 it is possible, in such a case, to transfer the VAT refund entitlement, provided that, before the contribution of going concern took place, the transferred assets and activities were accounted for separately in order to clearly identify the relevant data. 

However, if the transferred assets and activities were not accounted for separately, the transfer of the VAT credit may only take place provided that a related refund application was submitted before the contribution of going concern took place.