Italy imposes domestic reverse charge on laptops

Tue 17th Nov 2015

Italy have become the latest country to impose the domestic reverse charge on sales of laptops, game consules and computer tablets.  The order comes into place this immediately, and will last until the end of 2018.

EU VAT fraud

The domestic reverse charge is a VAT treatment will helps to eliminate the scope for VAT fraud. This problem is estimated at over €100 billion in lost revenues for ember states.

Fraudsters exploit the EU VAT regime’s reverse charge, which removes the obligation for the payment of VAT on sales transactions across EU borders. The criminal gangs declare such cross-border transactions as nil-rated, but actually sell the goods locally with VAT which they illegally pocket.

Under the European Commission’s Quick Reaction Mechanism, member states may apply to use the reverse charge on domestic transactions where they believe there is significant fraud. Italy has secured permission from the EC for this.