In 2021, I paid Italy Annual VAT Prepayment. My sales dropped to zero, and I can’t deduct it from my returns. I contacted Amazon, and after half year I finally got the answer:

Your 2021 prepayment is 2095 Euro, unfortunately, according to the Italian law, there is a minimum limit of € 2.582,28 to request a VAT refund.
The taxpayer can only request for a refund once he’s been in a credit position for 3 consecutive years. In the third year, the taxpayer can request the lower credit amount of the three-year.

Therefore unfortunately, due to the IT law restrictions the tax agent is not able to claim refund until 3 years time.

I am in process of de-registering my VAT services in Italy now.
It looks I have to wait to 2025 to claim the overpayment

I know many of us are in a similar situation. Did Avalara help to someone?