Merger leveraged buy-out transactions: Italian Revenue Agency allows VAT recovery on SPV transaction costs

With Resolution No. 7/2026, the Italian Revenue Agency clarified the VAT treatment of transaction costs incurred in Italian merger leveraged buy-out (MLBO) transactions. The document departs from the authority’s previous restrictive interpretation, confirming that a special purpose vehicle (SPV) – established to acquire a target company and subsequently merge into it – may, under certain conditions, recover VAT on legal, tax, financial and due diligence costs.