A guide to the invoicing mandate in Italy

Back in 2015 it was revealed that Italy had one of the largest VAT gaps of any EU member state, standing at €35 billion. Clearly, a change was needed. So in order to combat tax evasion and fraud, and move to electronic invoicing, the Italian government decided to adopt a new, mandatory clearance tax system.

The first thing on everyone’s lips when they saw this was 1) “OK, well, what does that mean?” then 2) “And, more importantly, what does that mean to me?” To answer these questions and provide you with a bit of reassurance, we thought it best to create you a comprehensive guide to the invoicing changes ahead in Italy.

What exactly happened?

Earlier this year, the Italian government decided to make electronic invoicing mandatory for all suppliers and service providers registered in Italy who send invoices to Italian customers. The reason they decided to do this was because they had the largest VAT gap in Europe, a figure surpassing €35 billion.

How does the new mandate affect me?

On 1 January 2019, the general mandate for all B2B and B2C transactions comes into force. Under the new system, all invoices must be submitted for registration – in a pre-defined XML format – through the online government platform (Sistema di Interscambio), before becoming a legal tax document.

The regulations will apply to companies residing or established in Italy, and they will also impact multi-national companies that transact using an Italian VAT number. And to boost the uptake onto the SDI platform, the Italian government will be offering multiple tax benefits to businesses – such as exemption from Intrastat reporting and priority for VAT repayments.

If you don’t comply? Failure to invoice in this way would mean that the invoice would be treated as if it was never issued. You would also face a penalty of 90-180% of the associated VAT amount. So if you have any clients or customers in Italy, you need to make sure you comply with these new regulations or else you will face big, costly penalties.

How do I make sure I am compliant?

If you’re doing business in Italy, you must soon ensure compliance with this regulation. The best way of doing this is by working with an electronic invoicing provider who is acting as an intermediary in Italy to send compliant invoices on your behalf to the government and to your buyer. And that’s where our invoicing solution comes in.

If you are a supplier that is currently using Taulia, we will now support all the necessary requirements under the new law:

  • Collecting the required invoice data
  • Generating the FatturaPA XML invoice in the prescribed format
  • Applying the required invoice signature
  • Reporting the invoice to the Italian Tax Authority (through the Sistema di Interscambio)
  • Delivering the invoice to your buyer

In short, this means we will support the full E2E process for taking invoice data from your AR department to the AP department of your buyer for payment – keeping the entire process simple and compliant.

Having helped suppliers create over 236 million invoices in 119 countries since our inception in 2009, we’ve acted as a compliant service provider in many clearance and post-audit countries. It brings us great satisfaction to say that we can continue to provide these services for buyers and suppliers who operate in Italy.

If you’d like to speak to one of our invoicing experts about the Italy e-invoicing mandate, then please contact us on info@taulia.com and we’ll be delighted to answer any of your questions.