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Italy: Tax procedure-related bank guarantees are refundable (Supreme Court decision)

Italy: Tax procedure-related bank guarantees

The Italian Supreme Court held that taxpayers that are required to provide bank guarantees in order to obtain refunds of Italian value added tax (VAT) are entitled to a full refund of the amounts of the bank’s guarantee costs.


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The decision identifying number is: no. 5508/2020 (28 February 2020)


A company (the taxpayer) submitted a claim to the tax authority for a VAT refund for 2001 and also submitted a bank guarantee as required under the VAT rules, in order to obtain the VAT refund. Subsequently, the company asked the tax authority for a refund of the costs incurred for the bank guarantee, but this refund claim was denied. The company appealed, and the case eventually ended up before the Italian Supreme Court.

The Italian Supreme Court held that the Italian Revenue Agency must refund the amount of bank guarantee costs incurred by the taxpayer in relation to the VAT refund. As the high court found, a provision of the tax law requires the tax authority to refund the costs of bank guarantees required of taxpayers that are seeking a suspension, to make a payment in instalments or a tax refund. As the court concluded, this rule also covers the cost of bank guarantees submitted to obtain a VAT refund.

KPMG observation

The decision affirms that taxpayers that submit bank guarantees to obtain Italian VAT refunds are entitled to a full refund of the related bank guarantee charges. The decision may present refund opportunities for taxpayers for a refund of bank guarantee costs associated with their tax procedures.

Read a March 2020 report [PDF 146 KB] prepared by the KPMG member firm in Italy

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