Italy reverse bad debt rule

Italy is to reverse bad debt relief on insolvent debts.

In 2016, the Stability Law introduced VAT relief via credit notes on output VAT not collected due to suppliers going bankrupt. The tax authorities would accept such amendments if the supplier bankruptcy proceedings had commenced.

However, this is now being changed in the 2017 Stability Law to the tax authorities only allowing VAT relief after the supplier being declared fully bankrupt – in line with the rules prior to 2016.

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