Right to VAT deduction without proof of payment: the turning point of the Court of Cassation in order no. 27238 of 2025
In the landscape of Italian tax law, the right to VAT deduction represents one of the fundamental pillars for ensuring tax neutrality for taxable persons. Often, however, taxpayers find themselves facing challenges from the Financial Administration that condition this right upon extremely rigid requirements. The Court of Cassation has intervened on this delicate issue with the significant order no. 27238 of October 11, 2025, offering a crucial clarification on the burden of proof in judicial proceedings.
The case and the decision of the Supreme Court
The dispute originated from an appeal filed by the taxpayer A. M. against the Revenue Agency. The second-instance Tax Court of Justice of Calabria had previously adopted a decision unfavorable to the taxpayer, prompting the latter to appeal to the Court of Cassation. The judges, under the presidency of G. F. T. and with the report by P. G., upheld the appeal, quashing the judgment and remanding the case.
The core of the decision lies in defining the limits within which the tax authorities may deny the VAT deduction. According to the judges of legitimacy, the tax office cannot demand evidentiary requirements not provided for by EU and national legislation, such as the actual financial disbursement, when the reality of the transaction is already amply demonstrated.
The principle of the dispute: what must the taxpayer prove?
To fully understand the scope of this order, it is essential to analyze the principle expressed by the judges of Piazza Cavour:
Regarding VAT, the right to deduction cannot be denied when the taxable person, who asserts it in court, demonstrates the substantive prerequisite of the supply of goods or services and provides proof of the formal requirement, through the relevant and valid purchase invoice, recorded in the VAT registers, whereas proof of payment is not necessary.
This ruling reaffirms a clear distinction between the existence of the transaction and its financial settlement. In other words, the actual payment of the invoice does not constitute a constitutive element of the right to deduct value-added tax.
Requirements for tax deduction
The ruling of the Court of Cassation is in perfect harmony with EEC Directive no. 112 of 2006 and Article 19 of Presidential Decree no. 633 of 1972. In order to legitimately deduct VAT, the taxpayer must satisfy two types of requirements:
- Substantive requirement: the actual performance of the supply of goods or services by the supplier in the exercise of a business, art, or profession.
- Formal requirement: the possession of a purchase invoice drawn up in accordance with legal standards and its regular entry in the mandatory VAT registers.
Once the taxpayer has provided proof of these two elements, the burden of proof shifts to the Financial Administration, which, if it intends to deny the right to deduction, must demonstrate the existence of fraud or abuse, and cannot merely object to the lack of a payment trail.
Conclusions
Order no. 27238 of 2025 represents an important point in favor of taxpayers, simplifying the defense in court against assessments based on mere financial formalisms. The decision confirms that VAT is a tax based on the principle of invoicing and accrual, not cash basis. Entrepreneurs and professionals can therefore look with greater serenity at the management of their deductions, strengthened by a jurisprudential orientation that is increasingly consolidated and oriented towards respect for the European principles of proportionality and fiscal neutrality.
