Mandatory E-Invoicing Changes Coming to Italy

Italy: Mandatory E-invoicing through “Sistema di Interscambio” (SDI) w.e.f. January 1, 2019
Italy has made e-invoicing mandatory for all “business-to-business” (B2B) and “business to consumer” (B2C) transactions irrespective of the size, industry and transaction value from 1 January 2019. All businesses must transmit the e-invoice through the Government platform “Sistema di Interscambia” to the Tax Authorities.
Businesses in Italy should ensure that they are prepared for this change. However, for the moment, cross-border transactions are excluded.
  • The e-invoicing system requires issuance of invoices in ‘Fattura PA’ XML format.
  • Once the seller submits the e-invoices, the SDI will validate the invoices.  If approved by SDI then the invoices will be made available to the customers by certified emails.
  • Non-issuance of an e-invoice will lead to a penalty and rejection of any input tax claims.
  • Any invoice without VAT must have the correct tax code assigned to it.
Points of concern
  • Both sales and purchases will be affected so the entire finance process should be reviewed.
  • All data held should be reviewed as the data required for each customer may not be available in the current ERP system. For example, each customer must have a code (indicePA).
  • In case the accounting / invoicing is outsourced, the company should ensure that the service provider is updating their systems.
  • Inform all clients / vendors about the changes in your system.
  • Inform all employees. Knowing the new process will help them in collecting proper bills for business expenses like hotel bills, especially if the company wishes to claim VAT on these.  
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