Italy’s E-Invoicing Mandate Extends to San Marino

Since Italy’s electronic invoicing mandate was introduced at the start of this year, suppliers performing cross-border transactions have been exempt from this obligation.  This is about to change as Italy and the enclaved country of San Marino will shortly agree on mutual mechanisms to allow the use of e-invoices for transactions between the two countries and for this to become mandatory.

The Italian and San Marino legal framework is progressively converging. The Italian Law-Decree of 30 April 2019, known as Decreto Crescita, extends the e-invoicing mandate scope to include cross-border transactions between Italy and San Marino. San Marino had already provided authorization in its 2019 Budget Law for its parliament to negotiate the adoption of e-invoices for transactions with the Italian Republic.

For now, neither country has published full details of the measures they will introduce or about the use of the Italian owned platform SDI (Sistema de Interscambio) for this purpose. There are however some indicators which would suggest that the e-invoicing model adopted for such transactions will be built around the current Italian framework. The wording of the Sammarinese Budget Law suggests an integration with the Italian system, and a note from the Sammarinese Finance Department dated 5 April states that the country is in contact with the Italian Tax Authorities to ensure the functionality of the e-invoices transmitted from and to Sammarinese operators through the SDI platform.

It is also unclear whether suppliers performing transactions between Italy and San Marino will have to report these operations in the Esterometro report, and whether they will also be required to submit additional documents to the respective tax authorities. At the moment, if an Italian business  opts to issue an e-invoice against a Sammarinese buyer, the Italian supplier does not legally have to report this transaction through the Esterometro. Nonetheless, this same supplier is still required to comply with the Italy-San Marino regulations and submit some paperwork to both tax authorities. In either case, the mandatory adoption of e-invoicing by both countries is expected to introduce new requirements and challenges for businesses to comply with.

For the time being, while the rules and regulations to mandate the introduction of e-invoicing for transactions between Italy and San Marino are being finalised, the previous rules on invoicing and reporting for cross-border operations between the two countries remain valid.