Update April 2021: From 01.01.2022 the Esterometro will cease to apply – all cross-border transactions will then have to be transmitted by Italian companies via the Sistema di Intercambio (SdI).
With the 2018 Budget Law, electronic invoicing using SdI has become mandatory for companies in Italy as of 01/01/2019.
Especially for Amazon traders this causes confusion when they register for tax in Italy – e.g. in the context of Amazon Pan EU.
But let us start at the beginning and explain all the terms.
What does the new regulation on electronic invoices mean in Italy?
Since 01.01.2019, electronic invoices must be issued in Italy for all supplies and services. This regulation initially contradicts EU law, according to which invoices can be issued in both paper and electronic form.
However, Italy has applied for a derogation to apply a mandatory e-invoicing system in order to combat the high level of tax evasion in Italy. The EU Commission has agreed to this – at least for a limited period of time.
Electronic invoices must be in the “FatturaPA” format, which is the XML format, and can be issued using appropriate invoicing tools.
SDI as central e-billing platform, obligation to use electronic signature and PEC
The e-bill must also be provided with a qualified electronic signature in order to be transmitted to the Sistema di Interscambio (SdI). The SdI is a public legal platform for issuing, transmitting and storing invoices.
It is mandatory to indicate the tax number of the recipient in the e-invoices if the recipient is an end consumer. Companies must send their PEC (posta elettronica certificata, in German “Zertifizierte E-Mail”) or their SdI recipient code to the invoice issuer in advance.
Important: The invoices are then sent to the invoice recipient only via the SdI.
Prior to this, the completeness and accuracy of all information recorded in the invoice is checked. In this way, the tax authorities can access all invoices and the information they contain and, if necessary, cross-check them with the information provided by the invoice recipients.
Codice Destinatario, Codice Univoco d’Ufficio (CUU)
To reach the recipient, you need to specify a code – a kind of address that will find the recipient. The code differs depending on the recipient.
The Codice Destinatario (in German: Empfängercode) is used in electronic invoices in the B2B or B2C area, i.e. between private parties, and consists of seven characters.
The Codice Univoco d’Ufficio (CUU) is used only for electronic invoices to public authorities and consists of six characters.
Who is obliged to issue Italian e-invoices via SdI?
If your company does not have a branch in Italy, there is no obligation to issue e-bills.
In a circular (n. 13/E), the Italian tax administration has clarified that the obligation to issue e-invoices applies only to companies permanently established in Italy.
Note: According to current EU law, the use of a foreign Amazonwarehouse does not count as a branch or permanent establishment in the respective EU country.
What if I am established in Italy but sell to foreign customers?
If you have your registered office or a branch in Italy, the following applies.
E-invoicing is in principle not required for sales or services from or to foreign companies. However, the Italian tax administration has introduced a new requirement for these cases in order to also cover transactions not settled via the SdI: the esterometro.
Esterometro: these requirements will apply until the end of 2021 at the latest
The Esterometro must be submitted monthly in XML format and replaces the Spesometro reports, which were mandatory until the end of 2018 and covers all transactions, including cross-border transactions.
This includes, for example, intra-Community acquisitions, imports and exports relevant to Amazon FBA sellers based in Italy.
However, the e-invoice exemption and the resulting esterometro requirement do not apply to sales or services from or to foreign companies registered for VAT in Italy. These invoices must be sent in electronic format through the SdI.
Since foreign companies are not obliged to issue e-invoices and therefore most likely do not have a PEC (certified e-mail address), in these cases the Italian taxpayer can enter the value “0000000” in the field “codice destinatario” (recipient code).
From 2022, the Italian SdI Value Added Tax reporting scheme will apply to all transactions, the Esterometro will no longer apply.
As of 01.01.2022, the Esterometro will be abolished and cross-border transactions must then also be recorded by the SDI system. The data of transactions to or from non-resident subjects must be transmitted via the Sistema di Intercambio (SdI) in the same form as all other invoices.
Different deadlines apply: transactions to subjects resident in the national territory must be transmitted via the SdI within the deadline for issuing the corresponding invoices.
Purchases may instead be submitted to the SdI until the fifteenth day of the month following receipt of the receipt evidencing the transaction.
What happens if Italian e-billing obligations are overlooked?
Invoices issued outside the legal e-invoicing requirement are considered not to have been issued and may result in a penalty payment of between 90% and 180% of the VAT due.
A transition period was still granted for the first half of 2019, which allowed taxpayers to avoid penalties if the e-bill was uploaded through SdI on the 15th of the following month.
Failure to submit the esterometro or submitting it incorrectly – by the end of 2021 – will instead result in a penalty of €2 per undocumented transaction.
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