Italy SDI real-time e-invoicing requirements
E-invoicing for Italy – Italy VAT
Since the 1st January 2019 resident Italian companies are now required to submit their domestic B2B and B2C invoices through the government’s data exchange system called ‘Sistema di Interscambio’ or SdI. SdI effectively acts as an invoice approval portal, ensuring all taxable transactions are verified live by the Italian tax authorities.
The full scope of e-invoices requirement applies to resident VAT registered businesses where:
- Non-resident VAT registered businesses are not obliged to submit live invoices.
- B2B transactions between private businesses.
- Invoices for a domestic supply of taxable goods or services are included.
- Intercompany transactions are encompassed.
- Exports and nil-rated EU intra-comm supplies of goods or services are excluded.
- A new, Esterometro, filing will be required from residents to list any supplies from or to non-residents
Invoices from/to resident VAT registered businesses and issued in paper format are not valid for VAT purposes and have to be treated as not issued. In order to recover the related input VAT the customer should ask the supplier to issue a compliant e-invoice via the SdI.
The e-invoicing rules do not apply to non-residents. However, Italian suppliers can choose to send e-invoices through the SdI to non-resident customers or report the data to the Italian tax authorities via the monthly cross border transactions report.
Should the Italian suppliers send e-invoices through the SdI to non-resident customers, they should also provide their non-resident customers with a paper copy of the e-invoice, where it should be mentioned that this is a paper copy of the e-invoice sent through the SdI.
In the first six months of 2019, it is reported that 97% of invoices processed were cleared without problems. The annual increase in VAT revenues is estimated to be twice as much as was originally forecast. Italy’s VAT gap is estimated by the EU to stand at over €35 billion per annum and accounts for one of the highest of all missing VAT in the member states of the EU.
New rules introduced for electronic marketplaces
Italy introduced new rules for VAT for sales conducted through electronic marketplaces with Law Decree No. 34 of 30/04/2019.
The newly implemented changes were effective from 01/05/2019 until 31/12/2019.
The rules create a reporting obligation in relation to certain distance sales through online marketplaces, and may create a liability for the marketplace if it does not comply with the reporting obligation and cannot demonstrate that the seller using it and has actually paid the VAT on a distance sale to the Italian tax office.
Under the new rules in Law Decree No. 34/2019, online marketplaces that support distance sales of any kind of imported goods, or distance sales of goods within the EU, are required to submit the below information on each seller carrying out these types of transactions.
The below information must be relayed to Italian authorities on a quarterly basis:
- The seller’s name, address and email address;
- The total number of goods sold in Italy;
- The total sales price for all goods sold in Italy or the average selling price for each unit sold in Italy
Italy VAT Updates
Discover more of the recent Italian tax and VAT updates on our Italian VAT Guide page.
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