Electronic invoicing was first introduced in Italy in 2014 in the public sector, before being extended in 2018 to businesses, and then the following year to exchanges between businesses and private individuals. This initiative enables Italy to respond to the European program to combat VAT fraud.
A benchmark in Europe
Italy's e-invoicing system is a benchmark in Europe. The government anticipated the entry into force of Directive 2014/55/EU on the obligation to receive and process electronic invoices from public administrations, notably by implementing a Clearance-type electronic invoicing model (FatturaPA).
In 2019, electronic invoicing was made mandatory for all business-to-business (B2B) and business-to-consumer (B2C) transactions taking place in Italy. Since that date, the parties concerned have been required to use the exchange system platform(SDI Sistema d'interscambio), which carries out the necessary checks beforesending an invoice to the final recipient. The platform may reject invoices that do not comply with the dematerialization requirements. Invoices not sent through this intermediary may incur penalties of up to 180% of the VAT due.
Combating VAT fraud
The reform of electronic invoicing in Italy was designed to simplify accounting and administrative procedures, improve efficiency and reduce costs for professionals.
Other expected benefits included :
- reducing accounting errors,
- limiting the risk of part tampering,
- reducing payment times.
The widespread use of electronic invoicing was initially motivated by the need to combat tax fraud. Indeed, Italy was the EU country with the largest VAT discrepancy in September 2018 (35.9 billion euros, according to the European Commission). The e-invoicing system now enables it to immediately check the concordance between VAT declared and VAT paid, and quickly block any suspicious transactions, greatly reducing the time taken by the tax authorities to carry out checks. The country has set itself the goal of improving tax collection, and expects to recover around 8 billion euros in additional tax revenue by 2024.
These measures have enabled Italy to assert itself once again as a forerunner in the digital field, paving the way for other member states.
"We had to make an effort to change mentalities, but now everyone is satisfied," reports Riccardo Cortese, a chartered accountant in Rome, to Les Echos newspaper.
In France, electronic invoicing is scheduled to become widespread in 2026, with a gradual roll-out of the reform from 2024.