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Approval from the Italian tax authorities for the notification model to communicate the reverse charge mechanism in the logistics industry

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​​​published on 10​ October 2025 | reading time approx. 8 minutes​


The 2025 Budget Law introduced an optional transitional regime, which allows companies operating in the logistics and transport industries to apply reverse charge and pay VAT on behalf of the service provider on services received under procurement contracts.

Procurement contracts and illegitimate external workers agreements: a measure against undue input VAT deduction 

The reasons for extending the scope of reverse charge lie in the need to curb VAT evasion in the logistics sector. The tax authorities argue that procurement contracts are often entered into to simulate the provision of external workforce.

Specifically, the procurement contract pursuant to Article 1655 of the Italian Civil Code is characterised by the role played by the contractor, i.e. the entrepreneur who employs his own production organisation and assumes the risks of carrying out the agreed work or service (Article 19, paragraph 1, Legislative Decree No. 276/2003). 

Conversely, if the person does not act as an entrepreneur but merely makes the labour of their employees available, essentially acting as an intermediary, the operation is considered to be the supply of external workforce. Since the latter is an activity reserved for specialised operators and subject to the issue of a specific ministerial authorisation, simulating a contract to disguise the provision of external workforce constitutes unlawful conduct. 

The consequence in the event of an assessment is the disallowance of the contract or subcontract, with the input VAT deducted by the client being contested and administrative and criminal penalties being applied by the tax authorities. 

In order to curb this phenomenon, the obligation to apply the reverse charge mechanism has been extended to “services provided through procurement and subcontracting contracts” to parties operating in the transport and logistics sector (Article 17, paragraph 6, letter quinquies), Presidential Decree No. 633/1972). However, this provision may only enter into force following the issue of authorisation pursuant to Article 395 of Directive No. 2006/112/EC by the Council of the European Union. 

Hence, an optional regime has been introduced pending the opinion of the Community legislator on the implementation of a definitive obligation. 

Advantages and features of the new regime

The non-deductibility of VAT paid is associated with penalties for undue deduction. Such penalties are calculated proportionally at 70 per cent of the amount of VAT wrongly deducted (Article 6, paragraph 6, Legislative Decree No. 471/1997). Moreover, criminal liability may still apply if certain quantitative thresholds are exceeded. 

Therefore, in the opinion of the author, voluntary adherence to the application of reverse charge by entities operating in the logistics and transport sector that receive services under procurement contracts mitigates the risk of the Revenue Agency contesting undue input VAT deductions.

Below is an overview of the main features of the new optional rules, following the publication of the document containing the operating instructions by the financial administration (Provision No. 309107/2025 of the Director of the Revenue Agency):​
  • The responsibility for submitting the communication to the Revenue Agency using the appropriate form (available at the following link:   mod) lies with the purchaser of the services provided under a contract;
  • No objective criteria have currently been established for identifying the client as a 'company that carries out goods transport and handling activities and provides logistics services', which is a requirement for access to the scheme. For the purposes of accurate identification, it may be appropriate to refer to the specific ATECO codes listed in the declaration of commencement of activity;
  • The application of reverse charge may also be requested with reference to transactions between subcontractors. In this case, the client is the subcontractor and the service provider is the subcontractor;
  • The exercise of the option in any of the relationships between subcontractor and subcontractor is independent of the exercise of the same in the relationship between client and first contractor. In addition, a separate communication must be submitted for each of the subcontracting relationships for which the option is to be used, stating the contractual details;
  • The option is valid for three years and is considered to be exercised from the date of transmission of the notification;
  • ​​Following the exercise of this option, the payment of VAT due on services rendered under contract and subcontract agreements will be made by the client in the name and on behalf of the service provider, who is nevertheless jointly and severally liable for the tax due and remains obliged to issue an invoice. 

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Skevi Licollari, PhD, LL.M.

Certified Tax Consultant, statutory auditor (Italy)

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Arianna Busdraghi

Degree in Economy (Italy)

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