Wondering what the invoice requirements are in Italy? Here is what you need to know.
Italian invoice requirements come in these key areas:
- When to issue the invoice
- The format of the invoice
- New invoice requirements
- The information one needs to provide on the invoices
- How long to keep the invoice
Note that these requirements are in place to align with invoicing in the EU as well as to reflect Italy’s VAT invoice requirements.
When to issue the invoice
Italy invoicing requirements demand that the invoice be issued on the date when you supplied goods or services. That period then extends 15 days after the month ends. So, if you were to issue an invoice on January 31 but failed, then you have till February 15 to issue the invoice.
Italy’s invoice requirements
As well as taking note of the above details, you need to be aware of exactly what should be in the invoice. Here are the details that must be included or appear on the invoice:
- Date of issue
- An invoice number (must be unique)
- Supplier’s registered VAT number
- Full address- both that of the supplier and the customer
- A description detailing what goods were supplied or which services were offered
- Quantity of goods (where applicable)
- Date goods were supplied ( included if it differs from invoice date)
- The net value of goods supplied (this is the net taxable amount)
- An applicable VAT rate(s) with specified amounts indicated (If VAT not charged, indicate reference law stipulating the same)
- Gross total
New e-invoice requirements
In Italy, new invoice requirements have been in place since January 1, 2019. The country’s tax authorities introduced the mandatory e-invoicing requirements for invoicing business (B2B), customers (B2C), and for public agencies.
The e-invoice requirements also state that all invoices must adhere to the format set by the Italian Revenue Agency. All invoices must now be converted into an XML format. You then need to send the invoice through the governments’ Sistema di Intercambio (SDI) exchange.
E-invoices are issued in three stages specified by the Italian Revenue Agency standard:
- Invoice receipt and submission through the SDL interchange system: submissions can be done through a PEC certified email, the Agency’s web or app service procedures, SdICoop, or through the SdIFtp data transmission service.
- Storage of invoices digitally.
Invoice formats not allowed after 2019
- Invoice images
- Unstructured invoices in HTML
- Paper invoices (scanned or sent via fax)
The use of these formats attracts penalties of between 90 and180 percent, applied to the VAT amount in an invoice not formated as required.
Multiple measures have been implemented to avoid tax evasion, increase VAT collection and cost savings, and Public Expenditure monitoring, due to the country’s VAT gap which as of 2018 was at EUR 35 billion. Italy, therefore, became the first EU country to implement mandatory e-invoicing for B2B and B2C transactions — Art. 1, Par. 909 et seq. Law no. 205/2017 (Budget Law 2018)
B2B (Business-to-Business) transactions are simply between-business transactions involving either manufacturer and wholesaler or wholesaler and retailer. Whereas B2C (Business-to-Consumer) is simply the sale of products and services directly between business and consumer. B2G (Business-to-Government) refers to the sale of products and services to the government.
The mandate was rolled in various phases:
- Phase 1– Use of e-invoicing for transactions between businesses and public bodies.
- Phase 2 — use of e-invoicing in businesses operating in the public sub-contracting sector and duty-free shops
- Phase 3 (final phase) — use of e-invoicing in all B2B and B2C transactions
These were all implemented in July 2018, September 2018, and January 2019 respectively.
Can you use a simplified invoice in Italy?
You are allowed to use simplified invoices for invoice amounts of up to €400. Initially, simplified invoices were allowed for up to €100.
A simplified invoice allows you to give minimal details that include:
- Invoice date
- Invoice number
- Supplier/Customer’s full name, including their address
- Supplier’s VAT number
- Client´s VAT or tax number (Codice fiscal)
- Gross amount
If you are looking to issue an invoice in the EU, it might serve you well to find out what a country’s requirements are. In Italy, check out for new e-invoice regulations. Note that multinationals in the country continue to issue invoices as before. That means the new e-invoice requirements do not apply to this category of businesses.
The new mandatory invoicing requirements are exclusive to the only residents and established Italian parties only. Transactions between non-resident, non-established or unidentified parties (termed ‘cross-border transactions’) need not be certified by said e-invoices. Instead, these transactions have to be communicated through the Italian Revenue Agency with specific electronic communication similar to the current communication of all data of purchases and sale invoices (‘Esterometro’).
Cross-border transactions are to report the following:
- Supplier/purchase data
- Date of Invoice/credit note
- Entry date of invoice/credit note
- Number of invoice/credit note
- Taxable amount, VAT rate, VAT amount, or, if no VAT is charged on the invoice, the type of the transaction performed.