Late invoices: more time to process and reclaim VAT

The more time you have to record invoices, the more time you have to manage the VAT deduction. In line with the provisions of Delegated Law 111/2023 on tax system reform and with a view to greater compliance with European VAT regulations, the Omnibus Amending Decree (approved by the Council of Ministers on 4 August) addresses the concerns of businesses who have complained that the time limits for claiming the deduction are excessively tight.

Consequently, by reinstating the system in force prior to the introduction of Decree-Law 50/2017, the provisions governing this right (Articles 19 and 25 of Presidential Decree 633/1972 and Articles 56 and 88 of the new Consolidated VAT Act) have been amended to stipulate that the deduction may be claimed no later than with the return relating to the second year following that in which the right arose (but always subject to the conditions in force on the date on which the tax became chargeable) and that the recording of invoices and import documents must also be carried out within the same time limit, with no further reference to the year in which the documents were received.

Driven by the needs of operators in compliance cooperatives (as noted in the impact assessment accompanying the measure), who require more time for audits, but for the benefit of all taxpayers, the amendment is also the result of the success of electronic invoicing, which has reduced the need to shorten the time limits for claiming deductions – the very reason behind the previous tightening of the rules.

The new measure should also resolve the issue of ‘year-end’ invoices relating to transactions with VAT due in year X, but which, having been received in year X+1, meant the deduction had to be made in the following year. As clarified in the explanatory report, thanks to the amendments made (Article 12 of the decree), an invoice for a transaction in 2026, received the following year, provided it is recorded by the deadline for the annual return relating to that year (30 April 2027), and recorded by the same deadline (in the relevant section), will allow for the deduction in the 2027 VAT return relating to 2026, which is the year in which the right arose. Under the previous rules, this applied only in the case of an invoice received in 2026 and recorded (in the relevant section) by the deadline for the return relating to that year. The only restriction that remains is the prohibition on including, for example, an invoice for December in the return for that month if it was received by 15 January of the following year.

Unlike the provisions of Decree-Law 50/2017, which stipulated that the reduction in time limits applies to documents issued from 1 January 2017 for transactions carried out and for which VAT is due from that date, the new regulations do not lay down any rules for the transitional period, coming into force on the day following the publication of the decree in the Official Gazette.