The Introduction of Reverse Charge in Logistics and Transport Contracts and Subcontracts
In recent years, the tax management of transport operations, as well as goods handling and logistics, has been under increasing scrutiny from Italian and European authorities. One of the most significant innovations has been the proposal to introduce the Reverse Charge mechanism in contracts and subcontracts for these activities. Following important regulatory updates in recent months of 2025, particularly with the entry into force of Decree Law No. 84/2025 (the "Tax Decree"), this regulation is not only close to becoming structural but has also seen some initially foreseen restrictions removed. While full implementation is still ongoing, it represents a decisive step forward in combating tax fraud and simplifying VAT management in a crucial sector.
But how did this proposal come about, and what problems does it aim to solve, considering the latest changes? What might be the practical impacts for industrial companies operating in the logistics and transport sector?
A Tool to Combat VAT Evasion in Italy
Italy is making significant progress in the fight against tax evasion, particularly concerning VAT. According to the CPI Observatory, overall evasion decreased from €108.4 billion in 2017 to €82.4 billion in 2021, with a notable reduction in VAT evasion, which dropped from €35.6 billion to €17.8 billion in the same period. In 2023, the Italian Revenue Agency recorded a record recovery of €24.7 billion, an increase of 22% compared to the previous year.
Despite these advancements, VAT evasion remains a significant challenge. In 2022, the VAT tax gap in the European Union was estimated at €89.3 billion, with Italy accounting for a significant portion of this gap.
In this context, the adoption of the Reverse Charge mechanism in the logistics and transport sector is emerging as an effective measure to further combat VAT evasion, by shifting the tax payment obligation from the supplier to the client, thereby reducing opportunities for fraud.
Why Reverse Charge is Becoming a Tax Priority and Expanding
Reverse Charge, or reverse accounting, is a mechanism that transfers the obligation to pay VAT from the supplier to the client. This system has been introduced in various sectors considered at risk of tax fraud and is now central to its application in logistics and transport. The proposal, initially included in the 2025 Budget Law and then strengthened and expanded by Decree Law No. 84/2025, aims to obtain authorization from the European Union to become structurally effective.
A key point of the latest updates is the elimination of the "predominant use of labor" or "use of client's goods" requirements that were initially considered. This means that the regulation will apply indiscriminately to all contract, subcontract, consortium assignment, or similar agreements in the logistics and transport sector, significantly broadening the scope of affected operations and making the mechanism more robust in combating fraud.
This regulation was developed in response to specific problems within the sector. In particular, it aims to counter unfair practices by consortium structures that issue invoices with VAT to the client without then paying the corresponding amount, subsequently closing the companies involved and transferring workers to other companies within the consortium. Often, the client remains unaware of such irregularities, as the only contractual interlocutor is the consortium's lead company, which handles all invoicing.
Imagine the case of Company Alpha, a significant industrial entity that enters into a contract with Company Beta for the management of logistics services. Company Beta, in turn, is a consortium that uses consortium companies to provide the necessary labor. Alpha regularly receives invoices from Beta, including VAT, and ensures that all documentation (DURC, DURF, and various certifications) is in order.
However, beneath the surface of this seemingly transparent relationship lies a fraudulent mechanism. One of Beta's consortium members, Company A, provides the personnel and invoices Beta with VAT without ever paying the tax to the Treasury. After a certain period, Company A is closed, and the personnel are transferred to Company B, another consortium member of the Beta consortium. Company B also continues the same practice: it issues invoices with VAT, does not make the required payments, and, before tax authorities can intervene, is closed, again transferring the personnel to a third consortium company, Company C. This cycle repeats, generating a chain of systematic tax evasion.
Despite Company Alpha being completely unaware of the irregularities within the Beta consortium, it still exposes itself to significant risks. Although formal checks appear regular, tax authorities might consider the relationship between Alpha and Beta not to be an authentic contract but rather an illegal supply of labor, pursuant to Article 10 of Legislative Decree 276/2003. This reclassification could stem from operational management that does not respect the typical criteria of a contract, such as Beta's lack of organizational autonomy or Alpha's direct control over the consortium's workers. In such a scenario, Alpha could lose its right to deduct VAT and be subject to tax and social security penalties, even without having any knowledge of the violations committed within the consortium.
What Would Change in This Situation with the Application of Reverse Charge?
In this case, Reverse Charge would represent an effective solution to prevent tax fraud and protect Company Alpha. With reverse accounting, VAT would no longer be paid to the Beta consortium but directly to the Treasury by Alpha. This mechanism would prevent the consortium members (A, B, C) from retaining VAT without paying it, blocking the fraudulent cycle of closures and re-openings.
Current Status and Possibilities for Voluntary Agreements: The Latest Developments
Currently, the Reverse Charge in logistics and transport contracts and subcontracts is awaiting final approval from the European Union for structural application. However, it is already possible for companies to enter into voluntary agreements between the service provider and the client, whose transitional rules have been aligned with the future structural regime. These agreements stipulate that VAT is paid by the client on behalf of the provider, offering a proactive solution.
Important new development: With the recent amendments to Decree Law No. 84/2025, each sub-contractor can now independently exercise the transitional option for voluntary agreements, even in the absence of a choice by the client or the primary contractor, offering greater flexibility throughout the supply chain.
Voluntary agreements, with a three-year duration, require prior communication to the Italian Revenue Agency and are particularly useful for companies that want to anticipate the benefits of future regulations and start mitigating fiscal risks now. Furthermore, starting from October 1, 2025, the payment of VAT related to these operations (when due via Reverse Charge) will occur on a quarterly basis, by the 16th of the second month following each calendar quarter.
Optimizing Compliance for a More Transparent Future
In an ever-evolving sector, choosing reliable partners and staying updated on regulations is fundamental. With the Reverse Charge, and its recent extensions that strengthen its application, the path towards more transparent and secure logistics is finally paved.
For companies interested in reducing tax risks and improving VAT management, entering into voluntary agreements can be a useful solution while awaiting the entry into force of the definitive legislation. It is essential to continue monitoring the evolution of the regulatory framework to adapt promptly to new provisions and seize the opportunities offered by greater tax transparency.
