Edited by Davide Accorsi, Pier Francesco Berardinelli
In the context of chain transactions, the failure of the middleman’s invoice to refer to the reverse charge mechanism prevents the application of the simplification rule for the “intra-Community triangular transactions”. This principle was affirmed by the Italian Tax Authorities in the recent Ruling No. 111/2026.
The case submitted to the Tax Authorities concerns the following chain transaction:
In particular, a German company that is neither registered nor established for VAT purposes in Italy (“Beta” or the “Applicant”) purchases goods from a Polish supplier (“Alfa”) and resells them to an Italian customer (“Gamma”). The goods are transported by Beta directly from Poland to Italy.
With regard to the invoicing arrangements:
- Alfa issues, through its Polish VAT number, an invoice for an intra-Community supply to Beta’s German VAT number;
- As the middleman, Beta also issues an invoice for an intra-EU supply from its German VAT number to Gamma’s Italian VAT number. However, this invoice does not refer to Article 141 of Directive No. 2006/112/EC (the “VAT Directive”), does not mention the reverse charge mechanism and does not designate Gamma as the person liable for payment of the VAT;
- Nevertheless, Gamma accounts for the VAT due on the intra-Community acquisition through the reverse charge mechanism.
Therefore, the Applicant requests the Tax Authorities to confirm that it could apply the simplification regime for intra-Community triangular transactions by issuing (i) a credit note offsetting the original incorrect invoice and (ii) a subsequent invoice including a reference to Article 141 of the VAT Directive, the reverse charge mechanism and the designation of the Italian customer as the person liable for payment of the VAT.
In this regard, it is worth recalling that Article 226(11a) of the VAT Directive requires that the reference “reverse charge” be included on an invoice “where the customer is liable for the payment of the VAT.” At the domestic level, Article 46(2) of Law Decree No. 331/1993 further provides that the invoice issued by the middleman must contain “the identification number assigned to the purchaser by the Member State of destination of the goods and the designation of that purchaser as the person liable for payment of the tax.”
According to the Italian Tax Authorities, the simplification rule for intra-Community triangular transactions cannot apply in the case at hand. This conclusion appears to be based on the absence of any reference to the reverse charge mechanism and the failure to designate Gamma as the person liable for payment of the VAT on the invoice, both of which are regarded as substantial requirements for the application of the simplification regime. Consequently, Beta should have registered for VAT purposes in Italy in order to carry out the intra-Community acquisition. The subsequent supply to Gamma should instead be treated as a domestic supply subject to the rules set out in Article 17(2) of Presidential Decree No. 633/1972.
Even if the Ruling does not expressly refer to EU case law, the adopted solution appears consistent with the principles established by the judgment of the Court of Justice of the European Union of December 8, 2022, case C-247/21, Luxury Trust Automobil GmbH, according to which “the intermediary acquiring the goods in a triangular transaction cannot substitute another statement for the words ‘Reverse charge’ while Article 226(11a) of the VAT Directive expressly requires those words to be stated.” Nevertheless, it should be noted that, in the case examined by the European Court, the final customer had not accounted for VAT in the Member State of destination, had been classified as a “missing trader” and could no longer be contacted.
Finally, it should be noted that the Italian Tax Authorities considered inadmissible the question concerning the penalties applicable to the case at hand. According to the Ruling reply, such an assessment falls outside the scope of the interpretation of tax provisions and entails factual evaluations that are within the competence of the offices responsible for tax audits and assessments.
Therefore, the Ruling confirms the strict approach adopted both by the Italian Tax Authorities and by the Court of Justice with regard to triangular transactions. Businesses involved in chain transactions should ensure that invoices contain all the elements required by both EU and domestic legislation. Seemingly formal errors may result in the loss of simplification regimes and trigger VAT registration obligations in the Member State of destination of the goods, with the consequent application of penalties.
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