As a general rule, Italian VAT can only be deducted as long as the expense is fully and entirely connected to the business activity of the taxpayer.
The below items are generally deducted at the following rates:
Deducting VAT prior to the beginning of the economic activity is only allowed under certain conditions. As a general rule, a company may recover VAT incurred prior to a VAT registration once all historic returns and VAT payments have been regularized. All late filing and late payment penalties should also be settled before deducting these amounts. A case by case analysis must be made.