EU Commission Green Lights Italy’s Electronic Invoicing Plans
The European Commission has recommended that the EU Council approve a request from Italy to derogate from the VAT Directive in introducing a mandatory electronic invoicing obligation on all taxable persons established in Italy except exempt small firms.
In its request, Italy submitted that introducing an obligation to provide such invoices through its Sistema de interscambio (SDI) platform, managed by the Italian Revenue Agency, would allow the tax administration to acquire in real time the information contained in the invoices issued and received by traders.
As a result, tax authorities can then carry out timely and automatic checks of the consistency between VAT declared and paid.
Italy considers that the introduction of a generalized electronic invoicing obligation would provide benefits in terms of combatting fraud and evasion, as well as in terms of simplification of tax collection.
Since 2014 taxable persons carrying out commercial transactions with the public authorities in Italy (20 percent of taxable persons) are under mandatory electronic invoicing.
All public administration invoices are channelled through the SDI and are forwarded to the general accounting office for expenditure control purposes and to public authorities. Also an optional system for the electronic transmission of data or for electronic B2B invoicing was introduced starting from 2017. The scheme gives the opportunity to opt for quarterly electronic transmission of data to the tax authorities on all invoices issued in the reference quarter.
Alternatively to this periodic data transmission, the suppliers can send and receive electronic invoices through the SDI. As from July 2016, the tax authorities have made available a free web application for generating, transmitting, and storing electronic invoices. Consequently, a number of businesses are already under the obligation to issue electronic invoices while other businesses had or will have a chance to get acquainted with it before the introduction of the measure.
The Commission has proposed that the Council should authorize this derogation, from Articles 218 and 232 of the EU VAT Directive, from July 1, 2018, until December 31, 2021.
Article 218 of the VAT Directive puts paper and electronic invoices on equal footing by providing that member states shall accept documents or messages on paper or in electronic form as invoices. Article 232 of the VAT Directive provides that the use of an electronic invoice shall be subject to acceptance of such by the recipient.
