Hot on the heels of Spain and Hungary, who recently made waves introducing real-time invoice reporting, Italy has gone a step further in its quest to reduce the VAT gap by adopting the “clearance model,” whereby tax authorities will audit and monitor transactions in real-time. This system is being used to great effect in Turkey and Latin America.
The Italian regime differs from the Spanish and Hungarian requirements in that the invoice isn’t transmitted to the tax authorities just for the purposes of reporting. Instead, it is sent at the issuance stage to the Italian Revenue Agency, which checks the invoice data, verifies it and only then sends it on to the customer, on behalf of the supplier.
Impacted taxpayers will have to create, transmit and archive the electronic invoices and any related corrections in XML format using the Sistema di Interscambio (SDI) data exchange system: this is the Revenue Agency’s e-invoicing platform, through which it validates the transactions in real-time before sending the invoice to the customer.
This new law will have effect to nearly all supplies from 1st January 2019, when the need to adhere to the Italian real-time electronic invoicing requirements will apply to all domestic business-to-business (B2B) transactions. The requirement to provide an electronic invoice will also apply to business-to-consumer (B2C) transactions if the consumer specifically requests an invoice, which means that non-established businesses registered as a result of distance selling may be impacted.
Many businesses may face difficulties in issuing, processing and archiving invoices to the prescribed specifications. Accordance is able to assist with these new obligations so if you have any questions on the above, please contact us at +44 (0) 1273 573 950 or via your normal contact.