Italy domestic VAT reverse charge transport & logistics

2025 Budget extends B2B anti-VAT fraud measure

Italy’s 2025 Budget, including the extension of the domestic reverse charge – eliminating the VAT-element of invoice payment to reduce fraud opportunities.

The domestic reverse charge removes the VAT cash payment on B2B deals which are subject to missing trader fraud. Instead of the seller of the trade being responsible for charging Italian VAT, their customer instead takes on the liability to report the VAT. This means the seller does not have to charge or collect VAT.

The new rules apply to services in the following sectors:

• Logistics
• Freight handling
• Transport

Read more in our Italian VAT guide

Many other European countries have introduced this fraud measure, including:

• Czech Republic
• Denmark
• Germany
• Ireland
• Poland
• Portugal
• Romania
• UK

Optional general and domestic reverse charge in EU

The EU’s VAT Directive permits two types of optional reverse charge

1. General Reverse Charge:  Non-resident companies selling goods domestically to other businesses, where countries elect the may provision of Article 194 of the EU VAT Directive, or similar rules outside of the EU (see list below); and
2. Domestic Reverse Charge: resident and non-resident companies selling fraud-sensitive goods where the country has elected under Article 199 of the EU VAT Directive (see below).

EU VAT General and Domestic Reverse Charge rule by country