E-Invoicing in Italy
The evolution of e-Invoicing in Italy from the beginning to nowadays
The before the GO-live date and the process
e-Invoicing in Italy has come a long way, evolving significantly from its inception to the present day. The journey began with the integration of various processes into a digital and automated system. 2019 represented the start of it for the B2B in Italy (2022 for micro enterprises), while e-invoicing for the B2G was already mandatory since 2015. However, the GO-live date has been postponed several times before 2019, greatly delaying the perception of the necessity of electronic invoicing and the huge impact and importance of this, leading many companies to not be ready before November 2018
The format of e-Invoices, as in Poland, is a digital structured data stream written in XML which also includes all the essential information found in a traditional paper invoice. Sending an electronic invoice is done according to a unique standardized process thanks to the Sistema di Interscambio (SDI) of Agenzia dell’entrate, which checks whether the e-invoice includes the necessary data (the mandatory data required for tax purposes) and the telematic address and whether the supplier and the client’s VAT number exist.
One of the primary objectives of implementing e-invoicing was to curb tax evasion and expedite various business processes. By enabling efficient VAT recovery, the system aimed to provide considerable advantages to companies in their accounts payable and receivable departments.
The aftermath to the present day and its benefits
The SDI (Sistema di Interscambio) implementation and thus the electronic invoicing requirement have fulfilled the intended purposes bringing great benefits to companies in both the account payable and receivable:
- Increased speed of invoice registration
- Simplification of the invoice verification phase
- Simplification of the payment approval phase
- Reduction of payments times
- Fast reconciliation of payments
Not to mention the side benefits of switching from paper to digital form:
- Reduction of the risk of error related to manual compilation
- Increased security
- Streamlined archiving
- Decreased risk of document loss
- More eco-friendly approach
Moreover, the State has benefited as planned from this implementation. In fact, there was a significant VAT recovery amounting to 6 billion euros in the first year alone, and these benefits are increasing year by year, as the 2022 report shows.
Regulatory changes and compliance
The normative, though, has changed and is still changing nowadays. Especially, the steps in the sending process are subject to continuous minor changes and implementations in order to refine the preparation process and enable the issuance of more specific and detailed invoices. As the industry keeps evolving, it is crucial for businesses to stay up-to-date on the latest changes to remain compliant and avoid potential penalties.
Marcin Ciarkowski, General Manager of MC Polska, said “Italy was the pioneer of this e-invoicing, which brings with it a much more complete and structured evolution project. We have relied on Italian partners precisely because of their knowledge and experience in this area. We aim not only to provide technology to Polish companies but also continuous regulatory consultancy and services that support this transition process ensuring speedy identification of potential threats or problems before they become serious, preserving business and speedy decision-making”.
In conclusion, e-Invoicing in Italy has undergone a remarkable transformation, revolutionizing how businesses manage their invoicing processes. The move from manual to digital has brought numerous advantages, both in terms of financial gains for companies and the overall environmental impact. Embracing this ever-changing landscape is crucial for businesses to stay on top of regulatory requirements and continue benefiting from the efficiency and transparency that e-invoicing offers.