Italy: Mandatory e-invoicing goes live from January 1, 2019

Wide application of e-invoicing to fight VAT fraud and to increase the standardization and the digitalization of the processes: as of January 1, 2019, in Italy e-invoicing will become mandatory for all B2B and B2C supplies of goods and provisions of services.

As recently clarified, e-invoicing will be mandatory only for persons who are established in Italy, while cross-border transactions shall be reported in a new, specific reporting. Even if the article of the law expressly states that e-invoicing is mandatory for all B2B and B2C supplies of goods and services between parties that are resident, established or registered for VAT purposes in Italy (Art. 1, Para 909, Law No. 205/2017), following the EU Council decision n. 2018/593, dated April 16, 2018 (authorizing Italy to introduce this special measure) the Italian Tax Authorities have clarified that e-invoicing will be mandatory only for persons established in Italy (see Circular Letter No. 13 issued on July 2, 2018, Para 1.2). So non-resident taxable persons (without a permanent establishment in Italy) and having only a VAT registration in Italy will not be obliged to adopt said new rules; they could receive (from suppliers established in Italy) e-invoices, provided that they can receive – upon request – also the paper copy of the invoice.

Focusing on the main requirements of B2B and B2C e-invoices, they can be summarized as follows:

• E-invoices must be issued in XML format not containing macro-instructions or executable codes
• E-invoices must be issued according to a specific pattern, although in the future additional patterns could be used moving from other European patterns or standards
• To create e-invoices, the Italian Tax Authorities will make several tools available, i.e. a web portal, a stand-alone software and an app. Alternatively, e-invoices could be created using third party software, provided that it is compliant with the related technical instructions provided by the Italian Tax Authorities.
• E-invoices must be electronically transmitted to the exchange data system called “SDI”
• E-invoices can be transmitted by (or received by) an appointed intermediary
• E-invoices are transmitted to the SDI using (alternatively) one of the following tools:
  • Certified email (so called “PEC service”)
  • Italian Tax Authorities web portal or app (so called “Fatture e corrispettivi”)
  • Cooperation system using internet web services, via HTTPS protocol (so-called “SdICoop service”) or Data exchange system using remote computers, via FTP protocol (so called “SdIFtp service”); these two options can be implemented only after the transmitting party has obtained a kind of “certification” by the SDI, attesting that the IT infrastructure of the transmitting party is able to communicate with the SDI.
• If some requirements are met, e-invoices transmitted via SDI can be electronically kept using the Italian Tax Authorities’ freely available archiving service.

Particular attention shall be paid to the procedure for creating and transmitting the invoice and related timing. In case of e-invoices, general VAT rules still apply, so the e-invoice must be issued when the transaction is deemed to be performed for VAT purposes, i.e. (apart from specific circumstances) by the end of the day when the goods or the services are supplied. As stated by the Italian Tax Authorities (Regulation No. 89757/2018 and Circular Letter No. 13/2018):

• The date of the e-invoice is the date stated in the specific box “Date” in the e-invoice
• The invoice must be immediately transmitted to the SDI. Only during the initial implementing period (whose duration has not been specified) will a possible minor delay in the transmission of the e-invoice not cause penalties, provided that this delay will have no impact on the timely VAT calculation and subsequent payment;
• In case of rejection by the SDI, the e-invoice will be treated as not having been issued; however, it could be correctly re-transmitted within the following five days, without incurring in any infringement.