E-invoicing in Italy…new requirement, new troubles? Bookmark has been added
E-invoicing in Italy…new requirement, new troubles?
Italy’s plan to make e-invoicing mandatory per 1st of January 2019* (for all local B2B and B2C supplies of goods and services, between established or VAT-registered parties) will create new challenges.
You thought you were on track by mastering SII in Spain, and preparing for Hungary; however, this is the curve ball that will make you guess again. Do you approach your system setup in a sustainable way?
E-invoices will have to be issued through the ‘Sistema di Intercambio’ system (‘SdI’). This is the platform currently used to transmit e-invoices to public bodies. It will allow the Italian Revenue Agency to automatically collect details of e-invoices, before it provides the e-invoice to your customer. This has to be done in the ‘Fattura PA’ XML format (currently version 1.2)*.
This requirement will hit both your AR and AP processes, as you will send and receive invoices in XML format in Italy. Will your shared service center know how to read an XML and assign the right tax code? How will your VAT integration document for intracommunity acquisition or reverse charge look like, does it need to be in XML format too? The information in the XML needs to be mapped to make sure that it is being sent, received, and reported correctly by all parties. Therefore, it is important to consider your intercompany processes, or your scanning software that currently feeds the information into the system. And – adding to the complexity – what about self-billing? How will the messages from the vendor and customer be read respectively by SdI, as the customer is creating the invoices on behalf of the vendor?
How will you deal with an invoice which has been rejected by SdI; should you change something to the XML and resend, or cancel and send a new XML?
This could be an interesting topic for companies that do self-billing or use portals where vendor invoices are created, as the invoice is often immediately booked. Furthermore, what if you or your suppliers are not able to send the invoices via the XML format on time? Aside from imposed penalties, could the Italian tax authorities also deny the deduction of input VAT, if they do not receive the invoice via XML format on time?
Please bear in mind, the decree is not crystal clear yet, but you should start thinking about how to implement the Italian obligation into your business processes. This is the next step in the real-time reporting journey of governments, in relation to Indirect Tax. While a bit sooner than anticipated, it will not be the last country nor the last change. Our team and our solutions are ready to assist you along the way, meaning we can reach compliance the way you want it – in a sustainable way that is ready to deal with new curve balls.
- For suppliers of fuel, e-invoicing is a mandatory obligation per July 1st, 2018. All other cross-border transactions fall under the monthly e-data reporting obligation.
- Fattura PA’ XML format is the only format currently admitted, although different formats based on European standards might be allowed in the future.