The Italian government has in recent years put in place a package of legal measures with the ambition of boosting the adoption of e-invoicing across all sectors and especially for SMEs. Not too long ago, the government went so far as to make the Sistema di Interscambio, the public platform used to issue B2G e-invoices (FatturaPA), available also to private companies for issuing B2B e-invoices – all free of charge.
This possibility was also coupled with a range of additional incentives; the underlying rationale being that if the technical threshold is lowered, while at the same time other administrative burdens are removed, more companies will be inclined to switch from paper to e-invoices using the public platform, thereby giving the state access to large amounts of data which in turn will effectively fight VAT fraud. One of the incentives is that taxpayers who use the platform for all their invoices (B2B, B2G and B2C) would not need to submit the quarterly e-report of a subset of invoice data.
It’s an interesting development, but more interesting still is how the Italian tax authority will leverage this big heap of fiscal data that it will soon have easily accessible. The more B2B e-invoices (and thereby raw fiscal data) the government gets access to, the lesser the need to have ancillary reporting requirements met. Why would the tax authority need to review reports of various e-invoice data if the e-invoices themselves are issued and stored within the government platform in a conveniently pre-defined XML format? No reason at all.
What we are seeing is a fundamental shift taking place. In the past we’ve said that the entire world is slowly moving in the direction of Clearance systems (such as Mexico, Turkey and Brazil to name a few). In the EU, we’ve predicted that B2G platforms would be used for clearance – Italy may be the first in a series of countries going down that rather obvious path of adopting clearance elements to its VAT system.