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Italy in hot water on shopper fraud VAT refunds

  • Dec 21, 2020 | Richard Asquith

Italy has been criticised by the European Central Bank for its policy of VAT deductions for shoppers who pay by credit card. The measure is designed to discourage cash-payments which are subject to high levels of under disclosure for VAT. The measure was introduced in December 2020.

The ECB stated that the measure undermined the objective of neutrality for different means of payments. The ECB called the measure disproportionate. “The ECB would appreciate that the Italian authorities give due consideration to the above observations by honouring the obligation to consult the ECB in the future where applicable,” the letter said.

The ECB is one of the parties contributing to Euro zone bailouts from the financial crisis. However, this ECB opinion in not binding.


VP Global Indirect Tax
Richard Asquith
VP Global Indirect Tax Richard Asquith
Richard Asquith is VP Global Indirect Tax at Avalara, helping businesses understand their compliance obligations as they grow globally. He is part of the European leadership team which won International Tax Review's 2020 Tax Technology Firm of the Year. Richard trained as an accountant with KPMG in the UK, and went on to work in Hungary, Russia and France with EY.
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