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VAT refund for non-residents: no refund in case of permanent establishment

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With the judgment No. 25685/5 of 04/09/2023, the Italian Court of Cassation rejected the appeal of a taxpayer, who claimed the right to a VAT refund for non-resident subjects. However, the company in question has established a permanent establishment in Italy. Therefore, the Court ruled obligations to exercise all rights and comply with all obligations relating to VAT.

The grounds for appeal

The company, based in Luxembourg, requests a VAT refund for transactions carried out on Italian territory, pursuant to Article 30(3)(e) of Presidential Decree No 633 of 1972. The refund is denied by the Italian Revenue Agency on the ground that the company has permanent establishment in Italy. Therefore, the Agency considers that Article 17 of Presidential Decree No. 633 of 1972, paragraph 3, must be applied and that the organisation is not a party entitled to request the refund.

The Judgment of the Court of Cassation

Since the permanent establishment is considered taxable under the VAT discipline and as such is required to submit the declaration just like the generality of VAT taxpayers, a refund is not granted to the parent company because it operates on national soil through the permanent establishment, which in turn may be granted the deduction or refund as an autonomous subject. The court therefore dismisses the company’s appeal.

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Regulatory Framework

Court of Cassation - Judgment of September 4, 2023 n.25685, Section 5


Decree of the President of the Republic of October 26, 1972 n.633


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