Dear Client,

we hereby draw your attention to the main changes introduced by Legislative Decree No. 148 of 7 August 2026 (the so-called “Omnibus Decree”), published in Official Gazette No. 185 of 11 August 2026, Ordinary Supplement No. 30, and in force as from 12 August 2026. Article 12 of the Decree extends by two years, as compared with the regime previously in force, the time limit for exercising the right to deduct VAT and for recording purchase invoices and customs bills.

1) TIME LIMIT FOR EXERCISING THE VAT  DEDUCTION

Article 12 of the Omnibus Decree amends Article 19, paragraph 1, of Presidential Decree No. 633/1972. The right to deduct input VAT may now be exercised, at the latest, in the return relating to the second year following that in which the right arose.

The “two-year” limit laid down by Article 19 of Presidential Decree No. 633/72 in the version preceding the amendments made by Law Decree No. 50/2017 is therefore reinstated.

The principle whereby the dies a quo does not depend on the invoice date alone remains central. The right of deduction may be exercised once both of the following conditions are met in respect of the transferee or customer:

1. the tax has become chargeable, as the substantive condition;
2. a valid invoice, drawn up in accordance with the applicable provisions, is held, as the formal condition.

Deduction further presupposes that the document has first been recorded in accordance with the requirements of Article 25 of Presidential Decree No. 633/1972. The extension of the time limit therefore does not remove the need for prompt and orderly management of documentation and accounting records.

2) RECORDING OF INVOICES AND CUSTOMS BILLS

The amended Article 25, paragraph 1, of Presidential Decree No. 633/1972 allows purchase invoices and customs bills to be recorded by the filing deadline for the annual return relating to the second year following that in which the invoice or customs bill was received.

The provision deletes the wording “and with reference to the same year”. That deletion suggests that, within the time limits indicated above, a document received in a given year may also be recorded in a subsequent financial year. This option calls for particular care in maintaining the VAT registers and in reconciling them with the annual returns.

As from 1 January 2027, the rules are transposed into the Consolidated VAT Act set out in Legislative Decree No. 10 of 19 January 2026: Article 56, paragraph 1, governs the time limit for exercising the right of deduction, and Article 88, paragraph 1, governs the recording of invoices and customs bills.

3) SCENARIOS AND COMPLIANCE OBLIGATIONS

The table below summarises the main operational scenarios and the related compliance obligations. The time limits must be verified by reference to the rules applicable to each individual document and to the filing deadline actually in force.

Scenario	Applicable regime / recording	Indicative time limit	Comments
Invoices issued on or after 12 August 2026	New rules	Filing deadline for the return relating to the second following year	Verify chargeability of the tax, receipt and correct recording of the document.
Invoices issued before 12 August 2026	Previous rules, even where the invoices are received after 12 August 2026.	Time limit laid down by the previous rules	Recording by the end of 2026 is recommended, without relying on the extension of the time limits.
Documents recorded in financial years subsequent to receipt	Recording is permitted within the limits of the applicable rules and provided that accounting records are kept in an orderly manner.	Filing deadline for the return relating to the second following year	Use of dedicated VAT sub-registers and reconciliation with the annual returns is advisable.
Documents straddling the year-end	Chargeability, receipt, issue and recording must each be verified separately.	To be determined on the basis of the applicable regime	Particular care should be taken over document traceability and sub-registers.

4) TRANSITIONAL REGIME: POSSIBLE INTERPRETATIVE APPROACHES

Legislative Decree No. 148 of 7 August 2026 (the so-called “Omnibus Decree”), in force as from 12 August 2026, contains no express transitional rules concerning the extension of the time limits for exercising the right to deduct VAT and for recording purchase invoices and customs bills. A degree of uncertainty therefore arises in identifying the documents to which the longer time limit applies.

A first interpretative option consists in applying the new rules exclusively to invoices issued on or after 12 August 2026. This approach finds prudent support in the 2017 precedent, where the legislator adopted a criterion based on the invoices issued; however, the current absence of an equivalent provision means it cannot be regarded as a settled solution.

A second option would be to apply the amendment only to invoices received after 12 August 2026. This gives weight to the point at which the document becomes available and to the link between recording and receipt, but it is uncertain because the rules on deduction also require verification that the tax has become chargeable and do not identify receipt as the sole starting point.

A third option would be to extend the new rules to all invoices issued during 2026. This approach could be supported on the ground that the amendment applies within the same tax period, but there is no express statutory provision giving the amendment retroactive effect for the whole year.

A fourth option would be to apply the longer time limit to invoices for which, as at 12 August 2026, the right of deduction had not yet expired under the previous rules. This criterion tends to preserve positions still open at the date on which the reform entered into force, but it is not expressly provided for and could give rise to misalignments between the deduction time limit and the recording time limit.

Pending official clarification from the Italian Revenue Agency or any interpretative legislative measure, the Firm considers it prudent to adopt the first approach: to apply the longer time limit to invoices issued on or after 12 August 2026 and, for invoices issued before that date, including any received thereafter, to recommend recording by the end of 2026 in accordance with the previous time limits, without relying on the extension introduced by the amendment. This approach will need to be reviewed in the light of the above clarifications or measures.

5) OPERATIONAL ASPECTS

The extension of the time limits calls for stronger internal procedures. In particular, we recommend ensuring that documents are date-stamped and logged and that evidence of receipt is retained, including the documentation available through the Interchange System (SdI), as well as the correct sequential numbering of the invoices and customs bills received.

The extension of the time limit does not alter the rules on deduction for the purposes of periodic VAT settlements and does not override the prohibition on the retroactive allocation of invoices straddling the year-end laid down by Article 1 of Presidential Decree No. 100 of 23 March 1998. An invoice relating to December that is received and recorded in January therefore falls within the settlement for the month of receipt/recording and not within that for December.

6) AMENDED VAT RETURN

An amended return must not be regarded as a substitute for timely recording of the document. In Ruling Reply No. 115 of 17 April 2025, the Italian Revenue Agency took a restrictive position, according to which recovery of the tax presupposes that the invoice has been recorded within the statutory time limits, even where the taxpayer intends to file an amended return.

The matter nevertheless raises interpretative issues requiring case-by-case assessment, having regard also to the actual sequence in which the document is received, recorded and reported in the return.

RECOMMENDATIONS
• Take stock of purchase invoices and customs bills not yet deducted.
• Verify the date of receipt and retain the related evidence, including via the SdI.
• Update accounting procedures and set up dedicated VAT sub-registers where necessary.
•   Analyse separately the documents and transactions straddling 12 August 2026.

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Recipients are asked to note that this circular letter constitutes preliminary information and practical guidance on the rules and provisions discussed.

For obvious reasons of timeliness and brevity, it does not provide a complete and exhaustive treatment of the subjects covered and is not intended to suggest binding decisions and/or courses of action.

We remain available to assist you in reviewing open positions, updating administrative procedures and assessing transitional cases. We therefore invite you to contact the Firm should you require any further information.