Commentary on Order No. 23262 of 2024: The Importance of the "Cartolarità" Principle in VAT

The recent Order No. 23262 of August 28, 2024, issued by the Court of Cassation, provides important clarifications on VAT matters, particularly regarding the application of the "cartolarità" principle in non-existent transactions. This ruling addresses a crucial issue for companies and professionals, highlighting the legal implications of the reverse charge mechanism and the responsibilities of the parties involved.

Context of the Ruling

The dispute concerns the application of VAT in transactions that, according to the tax authority, are non-existent. The core of the issue is based on the VAT payment by the buyer through the reverse charge mechanism, without the seller having correctly indicated the numerical amount of the tax on the invoice. Through this order, the Court reiterates the importance of "cartolarità" in VAT treatment, referencing Article 17, paragraph 3, of Presidential Decree No. 633 of 1972.

Analysis of the "Cartolarità" Principle

Exclusion - Application of the "cartolarità" principle pursuant to art. 17, paragraph 3, of Presidential Decree No. 633 of 1972 - Basis. In matters of non-existent transactions, the payment of VAT by the buyer through the reverse charge mechanism, without it being reported by the seller in its numerical amount on the invoice, as derived from the arithmetic calculation made by applying the rate to the taxable base, entails the application of the so-called "cartolarità" principle of art. 17, paragraph 3, of Presidential Decree No. 633 of 1972, as the mere indication on the invoice of the VAT due and its settlement - an indication necessarily made by the seller issuing the accounting document, for the purposes of both chargeback and deduction, according to the reverse charge procedure which the buyer must apply in their accounting records - is sufficient to make the seller/provider liable for the tax and likewise to maintain the non-deductibility of the VAT thus paid by the buyer/customer, who has settled and deducted the tax by applying the reverse charge.

The ruling clarifies that, even in the absence of a correct indication of the VAT amount on the invoice, the seller can still be held liable for the payment of the tax. This implies a shared responsibility between the seller and the buyer in complying with tax regulations, emphasizing the importance of correct invoicing and fiscal documentation management.

Practical Implications for Businesses

The guidance provided by the Court of Cassation in ruling No. 23262 of 2024 has several implications for companies and professionals:

• Need for attention in drafting invoices: It is essential for sellers to correctly indicate the VAT amount to avoid future disputes.
• Importance of the reverse charge mechanism: Companies must fully understand how the reverse charge works to avoid errors in VAT calculation and recording.
• Joint responsibility: Sellers and buyers must collaborate to ensure compliance with tax regulations, reducing the risk of assessments and penalties.

Conclusions

In conclusion, Order No. 23262 of 2024 represents a significant step forward in understanding the tax responsibilities related to VAT in non-existent transactions. The Court of Cassation, by referencing the "cartolarità" principle, has provided clarity on how to correctly manage invoices and tax records, emphasizing that proper documentation is essential to avoid penalties and disputes. Companies must therefore pay particular attention to their tax management to operate in compliance with current provisions and minimize legal and financial risks.