Electronic Invoicing in Italy, an assessment after a few years since its introduction


​​​​​​​​​​​​​​​​​​​​​​​​​published on 8 May 2024 | reading time approx. 4 minutes

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The introduction of electronic invoicing in Italy from 2015 for B2G and 2019 for B2B and B2C was a significant step towards efficiency and tax transparency. This measure was an effective response to tax evasion and enabled optimised business processing. However, despite its benefits, there is room for improvement, especially in terms of correction possibilities and deadlines. This development in Italy reflects a global trend in which many countries are turning to e-invoicing to modernise their business processes.


 As of 31 March 2015 for B2G (Business to Government) and as of 1 January 2019 for B2B (Business to Business) and B2C (Business to Consumers), sales made by businesses residing or established in Italy will have to be invoiced through so-called electronic invoicing, an invoice issued in electronic format and transmitted through a certified platform operated by the Italian Revenue Agency.
Electronic invoicing consists of the following steps:
  1. First, the electronic invoice must be created in a specific XML format using specific software. The document must then be digitally signed (with a qualified electronic signature) to guarantee its origin and content.
  2. ​The party issuing the invoice is required to transmit the document to the addressee, within twelve days of the transaction taking place, via the certified portal of the Revenue Agency called “Sistema di Interscambio” (SdI). This system is the platform operated by the tax administration from which all electronic invoices must transit.
  3. The SDI system automatically verifies the correctness of the document format and the completeness of the data entered.
  4. after the automatic technical checks (with a positive outcome), the SDI system automatically delivers the document to the recipient. 
Italy was one of the first countries to implement the electronic invoicing process in Europe and is currently the only EU country where electronic invoicing is mandatory in all B2G, B2B and B2C transactions.
More than five years after its introduction, it is possible to make some remarks on the advantages and disad­vantages associated with electronic invoicing.

Among the main benefits is certainly the standardization of the invoice format, which allows faster reading, understanding and identification of the main elements of the invoice, as well as allowing the automation of business processes of receiving and accounting invoices in accounting systems, reducing accounting time and the risk of errors.

In addition, the automatic control mechanism carried out by the SDI system has made it possible to reduce errors in the compilation of electronic invoices, when the document is issued.
In particular, the SDI system automatically verifies:
  1. The presence of the minimum compulsory information required by law, in particular, the identification data of the supplier and customer, the invoice number and date, the description of the nature, quantity and quality of the goods sold or services rendered, the taxable amount, rate and VAT;
  2. The correctness of the supplier's (transferor/provider's) VAT number and the customer's (transferee/purchaser's) VAT number or tax code;
  3. Consistency between the values of the taxable amount, rate and VAT (for example, if the taxable amount is 100 euros, the rate is 22 percent, the VAT is 22 euros);

If the controls are not successful, the SDI system issues, within five days from the date of transmission, a receipt rejecting the file to the person who issued the invoice. Note that invoices discarded by the SDI system are considered unissued. If the above checks are successful, the SDI system delivers the invoice to the receiving party and sends to the transmitting party a “delivery receipt” of the electronic invoice, which also contains information on the date of receipt by the recipient.

Furthermore, sending and receiving electronic invoices through the SDI portal allows a certified date for sending and receiving the document to be established.

An additional positive aspect of this system concerns the cross-reference of data flows generated by the issuance and receipt of electronic invoices, which enables the tax administration to prepare pre-filled drafts of periodic VAT return forms. This system, leveraging the flow of data already available to the tax administration to speed up the steps of pre-filing tax returns, becomes advantageous for simplifying taxpayer’s periodic compliance.

Although this mechanism for sending and receiving invoices is advantageous in some respects, some improve­ments could be made. Among the aspects to be improved there is the impossibility to correct a document transmitted to the SDI system.

Indeed, if there are errors in the invoice description or invoiced amount, it is not possible, even in a timely manner, to correct the document once it has been transmitted to the SDI. In those cases, a credit note must be issued to reverse the incorrect invoice and a new corrected invoice must be issued.

This could be simplified by providing for the possibility of correcting the detected error, within a given time interval, through a correction on the main document.

The twelve-day deadline imposition within which to issue the electronic invoice is also considered very compelling. Indeed, it would be appropriate to provide an extension of this deadline when there are holidays within this period, as provided for major tax deadlines.

In addition, the size of the penalties resulting from failure to issue an electronic invoice by the deadline appears disproportionate to the violation committed. The penalties, in fact, range from 250 to 1,000 euros in case of formal violations that do not change the tax settlement and from 90 to 180 percent, with a minimum of 500 euros, in case of substantial violations that change the tax settlement.

The introduction of mandatory electronic invoicing has played a central role in the fight against tax evasion. Although it is not possible to precisely quantify the portion of recovered revenue directly attributable to the introduction of E-Invoicing, a significant reduction in unreported or unpaid VAT has been estimated from the year of the introduction of the electronic invoicing (2019), amounting to about 4.1 billion euros in 2019 and 4.5 billion euros in 2020. [1]

Additional benefits from the implementation of the electronic invoicing mechanism are related to the process of automating the accounting aspects of issuing and recording invoices, as well as their storage in digital format. It is easy to imagine, especially for medium and large enterprises, significant cost savings related to the optimization of these processes.

It seems clear that the introduction of the electronic invoicing system has brought significant benefits, and these explain the recent trend of many EU (and non-EU) countries, which over the years have initiated the informatization procedures and the progressive path of introducing the electronic invoicing system into their legal systems.​

​​[1] See Ministry of Economy and Finance, Report on Shadow Economy, and Tax Evasion – Year 2022, pp. 28, which shows that the VAT Gap has been reduced from 31,8 billion in 2018 to 23,1 billion in 2020.​

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