Italy eInvoicing: What You Need to Know

Brendan Magauran
June 1, 2018

Italy will soon join Hungary in requiring real-time, transaction-level reporting. With the launch of the first phase imminent (1 July 2018), Italy’s tax authority recently released new information on its eInvoicing requirement.

In February, the European Commission backed Italy’s request to implement mandatory eInvoicing. This clearance is a game-changer for businesses operating in the European Union, as Italy is set to go one step further than Hungary in eInvoicing. With a broader scope of transactions and companies covered, it is likely to pave the way for rapid adoption by other countries.

Recently Agenzia delle Entrate released new updates. Here is the summary of the mandate based on this new information:

All B2B and B2C Taxpayers with Electronic Invoices Are Affected Starting 1 January, 2019.

Italy has progressed towards this full eInvoicing requirement since 2014, when it announced mandatory eInvoicing for certain business-to-government transactions. It then began testing an optional eInvoicing program in 2017, incentivising businesses that sent electronic invoices with reduced tax reporting burdens and faster reimbursements. With these trials underway to ensure a smoother transition, Italy is now rolling out eInvoicing to all taxpayers:

  • 1 July, 2018 – B2B eInvoicing becomes mandatory for petrol or diesel fuel for engines suppliers and subcontractors, under public service contracts.
  • 1 January, 2019 – B2B eInvoicing becomes mandatory for all private companies
  • The requirement also applies to B2C transactions when the buyer requests an electronic invoice. That is, if an invoice is provided electronically, it must be in the government-mandated format and follow the approval and submission process as outlined by the tax authority.

All Transactions Must Be Submitted to the Government.

Businesses must plan now to ensure the following processes are in place for compliance.

  • Creating transactions – Supplier invoices (TD01), deposit/down payment on invoice (TD02), deposit/down payment for fee (TD03), credit notes (TD04) and debit notes (TD05) must be created in the XML format defined by the Italian tax authority (FatturaPA XML).
  • Signings – Each transaction must contain a certified digital signature.
  • Sending – Transactions must be submitted when issued via the government exchange system (SDI – Sistema di Interscambio).
  • Receiving – Buyers have the responsibility of ensuring that transactions are received in the right format, or risk fines and penalties.
  • Accepting/rejecting – Business-to-government buyers must explicitly approve or reject transactions. If they have not done so within 15 days, the invoice is automatically approved.
  • Archiving – Companies must maintain transactions archived for 10 years.

eInvoicing implementation is not a simple on/off switch. It requires integration with your POS, billing, ERP,  AP, P2P and/or EDI systems, technical updates and changes to standard business processes, so companies must start now to ensure compliance in Italy.

Take Action

Learn more about the Italian mandate requirements and what you need to do to ensure compliance; watch our 30-minute on-demand webinar: Italy eInvoicing Q&A.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Brendan Magauran

Brendan Magauran is a Junior Regulatory Counsel at Sovos Compliance specializing in international taxation, with a focus on Value Added Tax Systems in the European Union. Brendan received his B.A. and J.D. from Washington University in St. Louis and is licensed to practice in New Hampshire and Massachusetts.
Share This Post

Tax Information Reporting United States
2019-03-22
How to Respond to the Growing Challenges of 1099-R Reporting

The demographics don’t lie: Reporting for form 1099-R is only going to grow more difficult as baby boomers retire. The form used to report distributions from IRA, pensions, annuities and other similar retirement accounts is poised to explode in volume. As such, financial institutions (FIs) and insurance companies can’t afford to mishandle 1099-R reporting. The […]

E-Invoicing Compliance EMEA
2019-03-21
Portugal Issues New E-Invoicing Rules: A Flavour of Clearance but Not Quite There

On 15 February 2019, Portugal published Decree-Law 28/2019 regarding the processing, archiving and dematerialization of invoices and other tax related documents including: The mandatory use of certified invoicing software General requirements for paper and electronic invoices Dematerialization of tax documentation Archiving of tax documentation (including ledgers, etc) Adjacent tax rules and obligations The decree aims […]

EMEA LATAM VAT & Fiscal Reporting
2019-03-18
Are We in the Golden Age of VAT Recovery?

The value-added tax (“VAT”) was described in the EU as a “”money machine” over 20 years ago. Yet according to a 2015 study by the European Commission by the Centre for Social and Economic Research (CASE), the “VAT gap” was approximately 168 billion EUR. This represents 15 percent of the theoretical VAT that would be […]

Tax Information Reporting United States
2019-03-15
As Legal Sports Gambling Grows, So Does Growth in W-2G Reporting

With the NCAA basketball tournament approaching, the US is gearing up for its biggest gambling weeks of the year. And while most “March Madness” pools might technically be illegal, legitimate sports betting is sweeping the US following last year’s landmark Supreme Court decision allowing states to legalize sports gambling in casinos.   As legal sports […]

E-Invoicing Compliance EMEA Italy
2019-03-14
Italy E-invoicing: Esterometro Reporting Requirements for Cross-border Transactions Updated

What is Esterometro? The Italian government’s e-invoicing mandate became effective on 1 January 2019.  While cross-border invoices are exempt, all domestic B2B and B2C invoices must be cleared through the SDI platform. This means that the Italian government and tax authority now have real-time access to the data of all B2B and B2C VAT transactions […]