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Residential properties investments and VAT deduction: Italy’s outlook

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The Italian Supreme Court (Corte di Cassazione) has reaffirmed that VAT deduction on the acquisition and management of properties must be determined based on the actual use of the property in an economic activity, irrespective of its cadastral classification (Decision No. 31506/2025). The Court emphasized that VAT neutrality – a fundamental principle governing the operation …

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