Electronic invoicing is increasingly relevant for companies doing business in Europe. Regardless of the sector, individuals and businesses will want to know as much as possible about the tools, related processes, and the evolving regulation shaping e-invoicing in Italy.
What is electronic invoicing?
The electronic invoice is an electronic document in a structured format that is electronically transmitted to the Italian Sistema di Interscambio (SdI). The acceptable format for an e-invoice is a file in XML (eXtensible Markup Language) that does not contain macro-instructions or specific codes to activate functions that can modify the text or data contained within. All e-invoices must be in compliance with the technical specifications established in Annex A of the Agenzia delle Entrate’s measure number 89757 of 30 April 2018.
The electronic transmission to the SdI may refer to a single invoice or a batch of invoices pursuant to Article 21(3) of Presidential Decree No 633 of 26th October 1972. The electronic invoice must contain the information detailed in Article 21 of Presidential Decree No. 633 of 26 October 1972. This means that, in the case of a simplified invoice, the information required by Article 21bis of the same decree and the other specific information must be present. In addition to the mandatory information, the electronic invoice file allows the optional insertion of further data useful for the management of the active and passive cycle of the operators.
The authenticity and integrity of the document are ensured by the electronic signature of the issuer and by the fact that the transmission takes place through the SdI that controls the document. At the same time, invoices will be automatically stored in the same online space.
Now we can say that the main differences from the traditional paper invoice are three:
- Sending methods
- Reception methods
- Tools employed: computer, tablet or smartphone
Who must issue an electronic invoice?
Starting in 2019, electronic invoicing became an obligation for all organizations and individuals doing business in Italy (apart from a small number of exempt persons). Penalties apply for those who do not follow the new rules.
Some types of businesses are not required to issue an electronic invoice:
- Firms and workers belonging to the “regime di vantaggio” or benefit scheme
- Firms and workers belonging to the “regime forfettario”, or flat-rate scheme
- Small agricultural producers
- Amateur sport clubs
- Non-residents doing business in Italy
- Doctors, pharmacies, and all other healthcare professionals (from December 2018)
All of these parties may participate in auto-invoicing using a TD01 code. This rule applies to everyone, in particular:
- Electronic invoicing in B2G: from March 31, 2015, electronic invoicing is compulsory for commercial relations with and from local Public Administrations, as well as for central Public Administrations, since June 6, 2014.
- Electronic invoicing in B2B: the invoicing obligation was extended to B2B in 2017. After the approval of Budget Law 2018, the obligation extended, from January 1, 2019, for transactions between companies and professionals except in the fuel sector where e-invoicing is mandatory from July 1.
- Electronic invoicing in B2C: from January 1, 2019, electronic invoicing to final consumers is required when goods and/or services are sold.
How to issue electronic invoicing?
Electronic invoicing can be completed and issued thanks to the support of:
- fee-based services that represent an easy and fast way to issue
- free services issued by Agenzia delle Entrate: there are three different programs that may be used to send the invoices: through the Web, from your PC, or using an app called “Fatturae”
- a specific form provided by the Agenzia delle Entrate to delegate electronic invoicing to an intermediary who will have access to the delegator’s data
Why was electronic invoicing introduced?
One of the main reasons why electronic invoicing has been introduced among private individuals is the desire, or rather the need, to eliminate or (at least) reduce tax evasion. According to the European Commission, Italy is the European Union country with the largest revenue gap: more than €35 billion. Italy evades 25% of the VAT of the entire European Union.
In Italy, a number of systems have been established to try to reduce the gap between the VAT due and what was actually paid. This is why electronic invoicing becomes the tool to overcome this type of problem. In fact, this solution allows you to check the correlation between VAT declared and paid in real time, giving the authorities the possibility to block transactions that are considered suspicious.
The reduction of tax evasion is only one of the many benefits that the introduction of electronic invoicing can bring. Directive 2014/55/EU of April 16, 2014, on electronic invoicing in public procurement, identifies the following benefits:
- Savings as a result of more efficient controls against tax evasion and consequently a better allocation of these resources to public spending
- Possibility to dematerialize business processes
Most of the benefits come from automation and integration of processes between the parties involved that result in reduced costs, reduced risk of forgery and duplication, fewer errors in payments and payment times, in addition to the expected benefits of lower printing and shipping costs.
Making this process digital eliminates the costs of printing, shipping, and postage, but the real revolution lies in digitalization. In fact, it has become possible to send invoices in electronic format to customers, accountants, and all interested parties in a simple way, making everything “virtual.”
What happens to those who don’t fulfil this obligation?
Although it is not easy to adapt to this new process, there are significant penalties for those who do not comply. In the event of non-compliance, the sanctions provided for in Article 6 of Legislative Decree no. 417/97 are applied: “sanzione amministrativa compresa tra il 90% e il 180% dell’imposta relativa all’imponibile non correttamente documentato o registrato nel corso dell’esercizio.” Some sanctions have been pushed back or reduced until June or September 30.
Because the regulation is still evolving, it is essential for organizations and individuals to be up to date on the continuous changes in the law. In order to avoid wasting (financial) resources and precious time, it becomes of strategic importance to rely on those who know how to manage invoicing and storage effectively and quickly.
March 29: updates for invoicing techniques
On March 29, 2019, Agenzia delle Entrate announced new updates to the invoicing techniques. These changes, introduced with version 1.4, entered into force on April 8, 2019. Here there are the changes:
- The consequences of exceeding the maximum size for SFTP media have been clarified
- The sending of the ER has been made explicit
- The consequences of failure to deliver PEC and WS have been explained
- The delivery method for invoices through the SdiFTP channel has been clarified
- The time from which the invoice is deemed to have been delivered to the SdI has been stated
- The email alert has been deleted
In addition, Agenzia delle Entrate the has communicated the updating of the document Istruzioni per il servizio SDIFTP (version 4.4.1). This describes the specific techniques related to the interaction with SdI for electronic invoicing via SFTP protocol for the “massive” exchange of documents.
Specifically, this document communicates that:
- Waste files (ER type) have been introduced for failed signature and/or decryption checks
- The EO result file is no longer signed or encrypted and it is renamed after successful transmission
- The description of the daily reports transmitted relative to the FIEO and FO supports (files leaving the SdI) has been introduced: the SdI produces two quadrature reports of the transmissions carried out every day. One is for the transmissions relative to the EO or ER file and the relative FI files (File in input to the SdI), one is for the FO file
- The section of the rules on the removal of supports has been integrated
Doxee: a reliable and certified supplier for electronic invoicing
Doxee allows you to achieve a perfect match between legal compliance and digitization simply and easily, reducing the costs related to the issue and distribution of documents through a series of actions:
- Receives billing flows in any format from the transferor
- Generates the XML format
- Sends it to the SdI
- Receives and manages every receipt of the individual invoices sent by the SdI
- Automatically stores invoices on LEA (its standard storage service)
- On request, it stores invoices in XML format on LEA
- Receives passive invoice flows
- It transmits to the customer only the XML invoice flows; the XML invoice flows with the addition of metadata files of other formats, the XML invoice flows with the addition of a PDF version obtained from the conversion of the XML format
- Alternatively, Doxee notifies the recipient when passive invoices are received
- It manages receipts to the SdI
- Automatically stores all invoices entered to the SdI
- On request, it can digitally archive invoices on LEA according to one of the two proposed methods
In 2017, Doxee managed 10% of the total number of invoices sent to the Public Administration in Italy. Doxee doesn’t just manage PA invoices: the core of the Doxee Paperless Experience offer is electronic invoicing to government and the private sector. But this is not all! In addition to Doxee Paperless Experience, the company offers Document Experience services for paper and digital document production and Interactive Experience services for interactive and personalized communication.