Mandatory Electronic Invoices in Italy: Exemptions for Non-Residents
By Pasquale Della Corte, COMMA 10
Italy has adopted the mandatory system of electronic invoices, effective from 01 January 2019, with the authorisation granted by the Council of the European Union. The invoice is issued in a predefined electronic format and then transmitted to the client and to the Italian Revenue Agency via an interchange system (SdI). This obligation exists for the supply of goods and the provision of services carried out between persons resident or established in Italy. Therefore, the electronic invoice is the only “offcial document” for such transactions, and also for VAT purposes.
Furthermore, the electronic invoice must be issued in both B2B and B2C transactions. However, in this latter case, the seller/provider must issue the consumer with a paper copy of the same invoice, unless otherwise agreed between the parties. Exemptions from issuing the electronic invoice are foreseen with regard to relations with nonresidents and the possibility of continuing to issue paper-based invoices in the ordinary way.
In particular, the electronic invoicing system does not apply to the sale of goods and the provision of services made to or implemented by:
VAT-taxable persons who are neither non-residents nor established in Italy, regardless of the country of residence (European or non-European);
VAT-taxable persons who are nonresidents and identified in Italy directly or via a tax representative.
Therefore, there is no mandatory requirement to issue/receive the electronic invoice for these transactions. In fact, the electronic invoice may be issued as an option based on an agreement between the parties or when the Italian seller/ provider considers it appropriate. In this latter case, however, the Italian taxable person is required to issue a paper copy of the invoice to the non-resident buyer/customer, for the purpose of enabling the persons identified in Italy to recover the VAT receivable, via a refund or, where possible, as a deduction.
Pasquale Della CorteGGI member firm
Chartered Accountants & Lawyers, Advisory, Auditing & Accounting, Corporate Finance, Tax
T: +39 02 481 9258
COMMA 10’s cornerstone is the professional collaboration between chartered accountants and lawyers and it offers its clients complete and inter-disciplinary services related to accounting, corporate, and tax services, in the legal area and, referring to the business area, corporate restructuring, and bankruptcy. COMMA 10 is based in Milan and provides integrated services to individuals and private and public companies, as well as non-profit organisations.
Pasquale Della Corte is a chartered accountant and has years of experience in VAT and international tax, advising foreign companies with subsidiaries and branches in Italy. He is also a member of the study commission for non-profit institutions of the Institute of Chartered Accountants of Rome.
Published: Indirect Taxes Newsletter, No. 09 Autumn 2019 l Photo: mmphoto - stock.adobe.com