Reverse Charge Tablet/Notebook/Smartphone

Accounting & Taxes

Topic summary

An Italian store needs to implement selective VAT reverse charge rules for specific products (tablets, PCs, laptops, cell phones, integrated circuits) when sold to verified resellers, as mandated by Article 17, paragraph 1, letter c of Presidential Decree 633/1973.

The Challenge:

  • Reverse charge should apply only to qualifying resellers (verified by specific ATECO codes)
  • Must be limited to specific product categories, not the entire catalog
  • Other products sold to the same resellers still require normal VAT

Current System Limitations:

  • Customer-level VAT exemption flags affect all products globally
  • Product-level tax removal applies to all customers indiscriminately
  • Tax override features cannot handle the required conditional logic

Example Scenario:
A normal customer buying a phone + cover pays VAT on both items. A verified reseller buying the same items should pay VAT only on the cover, with the phone sold VAT-free under reverse charge.

The discussion remains open with no solution identified for implementing this product-specific, customer-conditional tax treatment.

Summarized with AI on October 28. AI used: claude-sonnet-4-5-20250929.
1

Hello,

In a store there are customers who are end users while others are retailers in the sector.

I would need to apply the VAT exemption only to retailers in the sector only on some products (not the entire catalogue) for which the Reverse regulation is foreseen.

This is an Italian regulation (Article 17, paragraph 1, letter c), Presidential Decree no. 633/1973 establishes that for the sales of tablets, PCs and laptops, cell phones, integrated circuit devices carried out in the distribution phase, which precedes retail trade, the reverse charge mechanism applies to VAT operators.).

The sotre manager must carry out a manual check on the customer to verify the applicability of the rule (must be a reseller with a specific Italian ATECO code) but then the exemption should be applied only to some products (those provided for by the law)

If I apply the VAT exemption flag to the customer, this applies to the entire catalogue (it is not good).

If I remove the tax application flag on the product, it applies to all customers (it is not good).

I had also thought of using the override but I cannot make these conditions cross.

I could set a flag on the customer to know that this user is a retailer but then I would not know how to use it to give him the VAT exemption only on some products.

Example:

a “normal” customer buys a cell phone and a cover: I have to apply VAT on both products.
a “reseller” customer buys a cell phone and a cover: I have to apply VAT only on the cover and sell the cell phone VAT-free.