On April 16, 2018, the European Council approved Italy's derogation request from Articles 218 and 232 of the EU VAT Directive, bringing Italy one step closer to implementing its mandatory e-Invoicing requirement. Article 218 requires that Member States accept invoices in paper or electronic form. Article 232 provides that electronic invoice can only be used upon the consent of the recipient. Pursuant to the derogation, Italy is authorized to require vendors use and customers accept electronic invoices.
Italy believes that their e-invoicing requirement will allow them to more effectively combat fraud and evasion, boost efforts at digitalisation of their economy and simplify tax collection. The derogation shall apply from July 1, 2018 until December 31, 2021. The Italian e-invoicing requirement is slated to go into effect over several stages starting in July 2018, with a substantial number of taxpayers being impacted in January 2019.