Executive Summary:
This document provides a comprehensive overview of the evolving e-invoicing and regulatory compliance environment in Italy, encompassing significant updates, timelines, and initiatives spanning from 2022 to 2025. The Italian government is actively focused on tackling tax fraud and evasion, streamlining tax compliance for businesses, and adhering to EU directives, primarily through mandated e-invoicing, standardised systems such as SDI and NSO, and initiatives like ViDA. Recent developments include the introduction of a cross-border VAT exemption regime for small businesses, revisions to tax penalty structures, and ongoing extensions for mandatory e-invoicing and split payment mechanisms.
Key Themes and Developments:
- Mandatory E-Invoicing & Centralised Control: Italy remains at the forefront of mandatory e-invoicing adoption, utilising a centralised control model. The Sistema di Interscambio (SDI) is the mandatory infrastructure for invoices, while the Nodo Smistamento Ordini (NSO) handles orders. “As of 2022 and beyond, Italy follows a centralised e-invoicing/CTC model. E-invoicing through the SDI (Sistema di Interscambio) is mandatory for all suppliers and buyers.”
- Combating Tax Fraud and Evasion: A key impetus behind these regulatory changes is the ongoing effort to combat tax fraud and evasion. Mandatory e-invoicing, extensions of the split payment regime, and API platforms for tax information verification are all critical tools used to enhance transparency and control. “The main reasons for it were combatting tax fraud and evasion, simplifying tax compliance, and reducing business administrative costs.”
- Alignment with EU Directives (ViDA): Italy is an active participant in the EU’s VAT in the Digital Age (ViDA) initiative, with the goal of modernising the VAT system in the digital economy. A public consultation was conducted to gather feedback from taxpayers on the ViDA proposal. “The Ministry of Economy and Finance started a public consultation on the VAT in the Digital Age initiative, which allows different taxpayers to give their contributions and opinions on the proposed documents for consultation.”
- Easing Burdens for Small Businesses (SMEs): Several initiatives have been introduced to reduce the administrative burdens on small and medium-sized enterprises (SMEs). These include raising the VAT exemption threshold and implementing a cross-border VAT exemption regime. “The aim is to facilitate small businesses by reducing administrative burdens, along with supporting growth and development in cross-border trade within the European Union.”
- API Management Platform for Verification: The Italian Revenue Agency has launched an API Management platform offering free services for verifying Tax Codes and VAT numbers, enabling users to incorporate this functionality into their own applications. This simplifies digital service administration and promotion. “The Platform allows interoperability between the Agency’s service-providing system and the system user with methods enabling the integration of the respective applications.”
- Changes to Tax Penalty Regime: The tax penalty system has been overhauled to align with EU standards and ensure more proportional sanctions. “The new decree revising the tax sanction system aims to harmonize with other EU countries and provide more proportional sanctions to tax violations in the country.” Some penalties have been reduced, while new ones have been implemented for specific scenarios.
- Split Payment Regime Extension (with Restrictions): Italy has secured a derogation allowing the continued use of the split payment regime until 30 June 2026. The split payment regime means that when VAT is invoiced by a supplier, the VAT amount must be paid by the buyer/recipient of the invoice to the tax authorities. “The extension of the special measures for the split payment regime was granted with one exception, to honor Italy’s commitment to gradually phasing out this special measure.” As of 1 July 2025, its scope will be limited, excluding supplies to companies listed on the FTSE MIB index.
- Daily Receipts Data Reporting: Italy is streamlining daily receipts data reporting and storage by authorising the use of software solutions as alternatives to traditional telematic registers.
Specific Initiatives & Regulations:
- Cross-Border VAT Exemption Regime for Small Businesses (Effective January 1, 2025):
- Applies to EU businesses with annual turnover below €100,000 within the European territory.
- Turnover in each member state must not exceed €85,000 (in Italy) or the sectoral threshold.
- Businesses must obtain an “EX” identification number from the Revenue Agency.
- “From January 1, 2025, it’s possible for businesses to transmit the required notification via the Revenue Agency’s web services to obtain a so-called EX identification number.”
- Software Solutions for Daily Receipts Data Reporting:
- Legislative Decree 1/2024 enables the use of software solutions as alternatives to traditional telematic registers for corrispettivi giornalieri (daily receipts).
- Software must be secure, fully integrated, and allow interaction between daily receipt registration and electronic payment processes.
- Extension of Mandatory E-Invoicing:
- Italy has requested, and has likely been granted, an extension of the derogation to continue enforcing mandatory e-invoicing.
- The extension is potentially valid until 31 December 2025, or until the date Member States may apply national decisions following the adoption of the ViDA proposal.
- Updated Tax Penalty Regime (Effective September 1, 2024):
- Revisions include reductions and modifications to penalties for incorrectly documented VAT, invoicing violations, and intra-Community supplies of goods.
- “The penalty for sellers is 70% of incorrectly documented VAT, as opposed to the previous 90% and 180 with a new minimum of EUR 300 instead of EUR 500.”
- Split Payment Regime:
- The buyer pays the VAT amount directly to the tax authorities.
- Derogation granted until 30 June 2026.
- As of 1 July 2025, scope will exclude supplies to companies listed on the FTSE MIB index.
- API Management Platform:
- Provides free services to verify the validity of Tax Codes and VAT numbers.
- Available since 15 May 2023.
- VAT in the Digital Age (ViDA) Proposal:
- Public consultation held to collect taxpayer feedback.
Timeline of Key Events (2022-2025):
- July 1, 2022: Esterometro reporting obligation abolished; SDI extended to cross-border transactions; e-invoicing extended to more taxpayers.
- January 1, 2023: VAT exemption threshold increased to €85,000 (retroactive).
- April 3, 2023: Public consultation on ViDA initiated.
- May 15, 2023: API Management platform goes live.
- July 25, 2023: Derogation granted for the split payment regime until 30 June 2026.
- September 1, 2024: Updated tax penalty regime in effect.
- October 10, 2024: EC proposes extending Italy’s e-invoicing derogation.
- January 1, 2025: Cross-border VAT exemption regime implemented.
- July 1, 2025: Restrictions to the split payment regime come into effect.
- December 31, 2025: Potential end of the extended e-invoicing derogation (dependent on ViDA).
- June 30, 2026: Expiration of the split payment regime derogation.
Key Players:
- Agenzia delle Entrate (Italian Revenue Agency): Responsible for enforcing tax regulations.
- Ministry of Economy and Finance (Italy): Government ministry overseeing financial policy.
- European Commission: Executive branch of the European Union.
- EU Council: The council of ministers from EU member states.
- Small and Medium-sized Enterprises (SMEs): Businesses directly affected by regulatory changes.
Implications:
- Businesses operating in Italy must remain informed about ongoing regulatory changes and adapt their systems and processes accordingly.
- The shift towards digitalisation and automation necessitates investment in appropriate technology solutions.
- SMEs should capitalise on measures designed to alleviate administrative burden.
- Continuous monitoring of EU directives and their implementation in Italy is crucial.
Conclusion:
The Italian e-invoicing and regulatory landscape is constantly changing. The government’s commitment to combating tax fraud, simplifying compliance, and adhering to EU directives is fundamentally reshaping business operations. Staying informed and proactive is vital for navigating this dynamic environment.
