VAT Deductibility for Fixed Establishments: The ECJ Ruling and the Italian Legal System

In the Morgan Stanley case, the Court of Justice of the European Union (ECJ) offered new clarifications regarding the VAT-deductible proportion applicable to a branch established in a Member State other than that of its headquarters. In this article, the author runs through the legal and logical reasoning provided by the ECJ in order to highlight differences – both positive and negative – between that judgment and the current Italian legal system.