The susceptibility of the VAT process to VAT fraud has always been a concern for EU Member States. Consequently, countries have instigated specific measures to counteract the risks associated with this.

Two initiatives specifically have been gaining ascendency in the EU: the reverse charge mechanism and the split payment mechanism.

The reverse charge shifts the onus of paying the VAT on the buyer rather than the supplier. Under the split payment mechanism, customers are required to pay VAT directly to tax authorities, or into an account specifically designated for this purpose. The split payment mechanism is most associated with Poland, and it forms a critical part of their anti-fraud prevention measures.

The Italian government has deployed both measures. This month, the Italian government approved the split payment mechanism until 30 June 2026, and the reverse charge mechanism until the end of 2026.