Observatory › Value added tax › Input VAT: Legislative Decree 148/2026 restores the longer time limit

Input VAT: Legislative Decree 148/2026 restores the longer time limit

Legislative Decree no. 148 of 7 August 2026, in force since 12 August 2026, restores the second following year as the deadline for deducting input VAT and recording purchase invoices. The rule on year-end invoices announced in early readings is not in the published text, and its commencement remains the open question.

Legislative Decree no. 148 of 7 August 2026 (Ordinary Supplement no. 30 to Official Gazette no. 185 of 11 August 2026), in force since 12 August 2026, lays down “Supplementary and corrective provisions on income taxes, inheritance and gift tax, value added tax and excise duties, as well as on tax controls, cooperative compliance and simplification” and is a corrective decree issued under the tax reform enabling act (Law no. 111 of 9 August 2023). The right to deduct input VAT, and with it the day-to-day management of every taxable person, is affected by Article 12, which extends the time limits for deducting and recording. Early readings of the text approved by the Council of Ministers on 4 August also announced a new rule for invoices straddling the year end: it is not in the published text.

The rule currently in force

The right to deduct arises when the tax becomes chargeable. Until 11 August 2026, Article 19(1) of Presidential Decree no. 633 of 26 October 1972 provided that the right was to be exercised, at the latest, in the return for the year in which it arose and under the conditions existing at that time. As regards formal requirements, Article 25 of the same decree required the purchase invoice to be recorded before the periodic settlement (liquidazione periodica, the monthly or quarterly VAT computation) in which the deduction is taken and, in any event, by the deadline for filing the annual return for the year in which the invoice was received.

This framework is not the original one: it derives from Article 2 of Decree-Law no. 50 of 24 April 2017, converted with amendments by Law no. 96 of 21 June 2017, which replaced the earlier reference to the return for the second following year. In Circular no. 1/E of 17 January 2018 the Italian Revenue Agency (Agenzia delle Entrate) clarified that exercising the right requires two conditions to be met together: the tax must be chargeable and the invoice must be held. From this followed the consequence that weighed most heavily: an invoice for a December purchase but received in January could not be attributed to the year of the transaction, and the deduction could be taken only from the settlement for the month of receipt and by the deadline for the return for the year of receipt. Recording in a dedicated section of the purchase register, which the same circular governs, concerns a different situation (an invoice received during the year but not recorded by 31 December) and allows it to feed into the annual computation for the year of receipt without being included in the current year’s periodic settlements.

The time limit returns to the second following year

Article 12 amends both time limits in a coordinated way, the substantive one for the deduction and the formal one for recording, because extending the time limit in Article 19 alone would leave the taxable person without the accounting mechanism needed to exercise the right. The two limits remain differently anchored, however: the deduction can now be exercised by the deadline for filing the return for the second year following the one in which the right arose, whereas the invoice can be recorded by the deadline for the return for the second year following the year of receipt. In ordinary cases the two coincide; they diverge where the invoice is received in a year other than the year of chargeability, and it is in those cases that the calculation must be redone document by document.

Invoices straddling the year end: no new rule

Early readings of the text approved by the Council of Ministers also announced a new rule: an invoice relating to a transaction carried out in one year but received in the following year, provided it arrived before the return for the year in which the right arose was filed, would have been deductible in that same return, subject to its being recorded in a dedicated section of the purchase register. The published text does not contain it: Article 12 of Legislative Decree no. 148 of 7 August 2026 merely extends the time limits in Articles 19 and 25 of Presidential Decree 633/1972, and Article 1 of Presidential Decree no. 100 of 23 March 1998 has not been amended. The bar on backdated attribution in force since 2017 therefore remains: year-end invoices received in the following year are deducted by reference to the year of receipt (Agenzia delle Entrate circular no. 1/E of 17 January 2018).

A concrete example

Under the rules in force until 11 August 2026, an invoice received in 2026 and relating to a transaction on which the tax became chargeable in that same year had to be recorded, and the tax deducted, by 30 April 2027 at the latest, the deadline for filing the VAT return for 2026. With the time limit restored to the second following year, the same tax can be deducted by the deadline for the return relating to 2028, that is, by 30 April 2029. The common description “two-year time limit” is therefore approximate: the statutory reference is to the return for the second following year, so that the effective window ranges from a little over two years to more than three, depending on the month in which the tax became chargeable.

The open question: from when it applies

This is the most delicate issue and, as matters stand, one without a settled answer. The published text (Article 12 of Legislative Decree no. 148 of 7 August 2026, in force since 12 August 2026) contains no commencement provision and no transitional rules, which had been called for both to extend the new rules to rights already accrued and to protect deductions recovered by means of a supplementary return. The precedent points the other way: Article 2 of Decree-Law 50/2017 expressly delimited the application of the restriction. In the absence of a commencement provision, the position would have to be reconstructed by interpretation in the light of Article 11 of the preliminary provisions to the Civil Code and Article 3(1) of Law no. 212 of 27 July 2000, with the result that the extended time limit could be relied on for periods still open at the date of entry into force, but not to reopen those already time-barred. However, this is a reconstruction and not a statutory rule: before reopening input VAT not previously deducted, it is advisable to await official guidance.

What remains unchanged

Extending the time limit does not affect the conditions for deduction: restrictions relating to the nature of the goods and services and to the status of the taxable person remain in place, as do the specific exclusions from the right and the pro rata (partial exemption) calculation. Precisely because the time limit is being extended, the wording of Article 19(1) requiring the right to be exercised under the conditions existing when it arose deserves attention: the applicable deductible percentage remains that of the year in which the right arose, not that of the year in which the invoice is recorded. Businesses operating under a pro rata will therefore need to retain, for each document deducted late, evidence of the percentage for the relevant year, which two or three years on will almost always differ from the current one. Nor is the longer period an amnesty: an invoice never received, or relating to a non-existent transaction or to a purchase not made for the purposes of the business, does not become deductible merely because more time is available. Finally, the risk of findings on the penalty side remains, under Article 6(6) of Legislative Decree no. 471 of 18 December 1997, where the deduction is taken out of time or in excess of the amount due, with the possibility of voluntary correction under Article 13 of Legislative Decree 472/1997.

Coordination with the VAT Consolidated Act

The provisions of the VAT Consolidated Act, enacted by Legislative Decree no. 10 of 19 January 2026 (Ordinary Supplement no. 4 to Official Gazette no. 24 of 30 January 2026), apply from 1 January 2027; the decree itself entered into force on 31 January 2026. It reorganises Presidential Decree 633/1972 and Decree-Law no. 331 of 30 August 1993 into 171 articles without altering the substantive rules. For that very reason it was finalised reflecting the framework then in force, namely the one-year limit: the corrective decree, published as Legislative Decree no. 148 of 7 August 2026, therefore amends both texts: Article 12(1) amends Articles 19 and 25 of Presidential Decree 633/1972 and Article 12(2) the corresponding Articles 56 and 88 of the Consolidated Act, so the extended time limit continues to apply from 1 January 2027. The timetable itself should also be treated with caution: the consolidated acts enacted by Legislative Decrees 173/2024 and 174/2024 have already been deferred once, and a further postponement is not a remote possibility.

What to do now

The decree was published in the Official Gazette of 11 August 2026 (Legislative Decree no. 148 of 7 August 2026) and has been in force since 12 August 2026, with no transitional rules: time limits that have already expired are not expressly reopened. It is, however, an appropriate moment to carry out a systematic review of purchase invoices received but not yet recorded, distinguishing them by year of chargeability and year of receipt, and to note the new time limit for each: for invoices received in 2026 it is 30 April 2029. For invoices both chargeable and received in 2025 the deadline already fell on 30 April 2026: in those cases the route is not the corrective decree but, if anything, a claim for repayment of tax not due under Article 30-ter of Presidential Decree 633/1972, an avenue on which official guidance and case law are not fully aligned and which must be assessed case by case. In dealings with suppliers it is advisable to request the issue and transmission of any missing documents, without prejudice to the customer’s own duty to report unissued invoices to the Revenue Agency under Article 6(8) of Legislative Decree 471/1997: a delay does not forfeit the deduction, since the right arises with chargeability and the recording deadline is anchored to the year of receipt, but it shifts the year of attribution and pulls the two time limits apart, with consequences for cash-flow planning. The published text contains no commencement rules: pending official guidance, that absence leaves uncertain which input VAT not yet deducted can actually be recovered.

• Legislative Decree no. 148 of 7 August 2026, Article 12 (Official Gazette no. 185 of 11 August 2026, Ordinary Supplement no. 30), in force since 12 August 2026 – time limits for deducting input VAT and recording purchase invoices, in Presidential Decree 633/1972 and in the VAT Consolidated Act.
• Law no. 111 of 9 August 2023 – enabling act delegating the tax reform to the Government.
• Presidential Decree no. 633 of 26 October 1972, Articles 19(1), 25 and 30-ter – exercise of the right to deduct, recording of purchase invoices and repayment of tax not due.
• Decree-Law no. 50 of 24 April 2017, Article 2, converted with amendments by Law no. 96 of 21 June 2017 – shortening of the time limits for deduction and recording.
• Italian Revenue Agency, Circular no. 1/E of 17 January 2018 – the twin requirements of chargeability and possession of the invoice; year-end invoices.
• Legislative Decree no. 10 of 19 January 2026 – VAT Consolidated Act, Official Gazette no. 24 of 30 January 2026, Ordinary Supplement no. 4; provisions applicable from 1 January 2027.
• Article 11 of the preliminary provisions to the Civil Code and Article 3(1) of Law no. 212 of 27 July 2000 – temporal effect of tax legislation.
• Legislative Decree no. 471 of 18 December 1997, Article 6(6) and 6(8), and Legislative Decree no. 472 of 18 December 1997, Article 13 – penalties relating to deduction, the duty to report unissued invoices and voluntary correction.

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• Decree-Law 200/2025, converted by Law 26/2026 – deferral of the consolidated acts enacted by Legislative Decrees 173/2024 and 174/2024.
• Update of 22 October 2026: this note, written on 6 August on the text approved by the Council of Ministers, has been checked against the published text of Legislative Decree no. 148 of 7 August 2026.