New Italian Ruling affecting VAT Groups

The Italian Tax agency issued a ruling introducing  changes to VAT grouping rules, effective from 05 November 2025.

The ruling responds to a specific tax ruling request involving a Dutch parent company and its Italian subsidiary participating in an Italian VAT Group. Specifically, it provides clarifications on the VAT Group regime regarding the conditions for exemption from the requirement to provide a guarantee against a VAT credit within a VAT Group.

Italian standard approach to input VAT Group credit

In principle in a VAT Group, when one member generates a credit VAT, normally a bank guarantee is required to be set up before offsetting that input VAT credit against other VAT liabilites. However, the ruling issued in November clarifies the conditions under which this requirement to present a bank guarantee can be waived within a VAT Group.

Key changes introduced via the ruling

If the following conditions are satisfied, the standard bank guarantee obligation can be waived

1. Two-Year Activity Requirement: to qualify for exemption from guarantees on input VAT exceeding €30,000, companies must have been operating for at least two years at the date the annual VAT return is filed;
2. Correcting Omissions with an Integrative Return: the ruling states the possibility to retroactively obtain the exemption from setting up a bank guarantee within the assessment deadlines by filing of a supplementary VAT return with a compliance certificate certification (visto di conformità), but only if there are no active VAT audits in progress.

Penalties for late compliance are introduced as fixed or proportional amounts depending on the time the disclosure is filed.

Practical Implications for companies

• Italian VAT Groups must be careful with timely compliance on guarantees if they intend to use offset input credits without upfront bank guarantees;
• The ruling is particularly relevant for groups with foreign parents or cross-border structures that have a representative in Italy and seek to optimize VAT cash flow by offsetting credits among members.

If your business is affected by these changes, it’s important to act quickly. If your company is affected by this update and requires additional information, please do not hesitate to get in touch