Italien

Authorization for split payment mechanism Our recent post commented on Italy’s pursuit for the continuation of the split payment mechanism. The post explains why the split payment mechanism is regarded as an effective measure to counter VAT fraud.   The European Commission has now authorized Italy to continue with the use of the split payment mechanism until 30 June 2026. Notably, companies listed on the FTSE MIB Index will be excluded from the split payment mechanism from 1 July 2025.  The split payment mechanism is strongly associated with Polen, who similarly received authorization to continue with the feature in April 2022. Our e-invoicing solution in Poland today accommodates the split payment mechanism, if relevant to our customers.  

Split payment renewal Spit payments in the e-invoicing terrain have most recently been associated with Poland. By means of some background, split payments often serve as an effective measure to maintain tax regulation, as the buyer typically pays money into a bank account dedicated solely to tax purposes. Critically, this ensures the payment of VAT and is thus viewed as an effective measure to reduce the VAT gap.   Italy, like Poland, has also made use of the split payment mechanism, although to date this has been restricted to the Business to Government (B2G) sphere. The split payment mechanism in Italy has been in operation since 2015 and was due to expire in June 2023.    The Italian Minister of Finance has announced that the procedure for the renewal of the split payment is nearing completion, reinforcing the split payment as an integral feature of Italy’s e-invoicing topography.   

Introduction of free services via new API Management platform The Revenue Agency published a new provision on 4 April 2023 relating to the use of free services in API Management platform and General Conditions.   The new API management platform was established on 15 May 2023 and provides free services regarding the validation of the data for taxpayers who are interested in using it with their own systems.   Further details regarding the same can be located on the Italian authority website via the link below:   https://www.agenziaentrate.gov.it/portale/documents/20143/5202816/Provvedimento+del+4_4_23+servizi+in+Api.pdf/4e3a2055-c75b-fb0c-daac-7dda27ee6a1c     

Public consultation on ViDA proposal As noise around the VAT in the Digital Age (ViDA) proposal intensifies, multiple EU Member States are currently debating the proposal in their national parliaments. We expect there to be a flurry of activity as EU Member States contemplate and debate the proposal.   Italy is the latest country to actively engage with the proposal, with the Italian Ministry of Economy and Finance having launched a public consultation regarding the VAT in the Digital Age proposal. Parties could provide feedback and leave comments until 10 April 2023.  The link below provides access to the Italian public consultation:  https://www1.finanze.gov.it/finanze2/servizi/n_consult_newDF/consulta.php?id=8727608&step=0  The VAT in the Digital Age (ViDA) proposal is a critical development which endeavours to structure the e-invoicing and e-reporting landscape over the next few years. You can read more about the proposal in our recent post here. 

Circular clarifying delayed sending of e-invoicing Italy’s e-invoicing mandate introduced in 2019, and the subsequent cross-border obligations instituted in 2022, are both complex e-invoicing and e-reporting solutions respectively, often prompting questions by Italian taxpayers. Consequently, the Italian government frequently issues circulars on unclear or nebulous issues.  Circular N.6 dated 20 March 2023 clarifies that the sending of electronic invoices to the Exchange System (SdI) after the ordinary deadlines is considered a formal irregularity, and therefore remediable, provided that the same invoices are correctly included in the relevant VAT settlement, with relative payment of the tax. For the same reason, the failure to send the electronic payments stored and entered in the accounts can be remedied with the payment of the tax due. The Circular therefore provides taxpayers with some concessions, even though ordinary deadlines may have been breached.  The Circular can be accessed via the following link:  https://www.agenziaentrate.gov.it/portale/documents/20143/5081192/circolare+n+6_tregua_fiscale_del+20+marzo+2023.pdf/5e8a2e76-dd65-3188-b9a7-9e6f1fa86aff 

VAT registration threshold increase Increasing (or reducing) the VAT threshold is a frequent fiscal procedure deployed by countries and may be triggered by multiple reasons. Increasing the VAT threshold holds some advantages for taxpayers- particularly those companies who, because of the increase, find themselves relieved of multiple VAT obligations.  Italy has proposed to increase its threshold for VAT registration from 65,000 Euros to 85,000 Euros. The European Commission and European Council, whose permission is required to raise the VAT registration threshold, has supported the increase.  This measure must not be underestimated- Italy’s VAT registration threshold is the highest in the European Union to date. It will be effective from 1 January 2023 to 31 December 2024, at which point it will need re-assessment.  

Pre-filled VAT returns   Countries frequently review their fiscal procedures, often primarily with a view to simplify the tax process for the end user- the taxpayer.   Last month in Greece we saw the government offer taxpayers, on an optional basis, the provision to access pre-filled VAT returns. This month Italy is offering taxpayers, under certain circumstances, a similar incentive.    The pre-filled VAT returns are intrinsically linked with e-invoicing in Italy- as the taxpayers selected for this functionality will be based on 2022 transaction data issued via the Italian e-invoicing platform, the Sistema di Interscambio (SdI). Thus far, this service is only available to resident taxpayers using the cash regime and filing quarterly.    The shift to pre-filled VAT returns shows Italy following the trajectory of countries implementing similar measures, such as Spain and Portugal.    The drive towards digitisation and automation of fiscal procedures more generally is mirrored in the VAT in the Digital Age (ViDA) proposal, manifesting the streamlining of fiscal procedures is very much in the public consciousness. You can read more about the ViDA proposal in our recent post here.     

VAT reduction extension for district heating service contracts 2022 saw Italy catering for taxpayers by providing several VAT concessions. These continue in 2023.   The 5% reduced VAT rate will now be extended to the supply of district heating services between January – March 2023.   Italy is a compliant territory for Tungsten Network and we support all valid VAT rates in the country.  

Postponement of the Plastic Packaging Tax (PPT) Italy – postponement of the Plastic Packaging Tax (PPT) (other taxes)  The draft Budget Law 2023 in Italy has indicated that the Plastic Packaging Tax (PPT) will be postponed from 1 January 2023 to 1 January 2024.  Tungsten is accommodating the Plastic Packaging Tax in Spain, which commenced on 1 January 2023. We will keep you updated with any developments with the PPT in Italy, if implemented. 

Update on storage of e-invoicing data Departing from its former process, the Italian tax authorities have confirmed that they will store e-invoicing data for customers, even without the consultation agreement with the taxpayer.  

Compilation Guide update The Italian tax authorities previously released a new version, 1.7.1, of the Compilation Guide for electronic invoicing and the Esterometro, which updated Annex A of the technical documentation for B2B e-invoicing. This outlined further detail around document types TD17, TD18 and TD19 in Italy.    The Italian authorities have now released version 1.8 of the Compilation Guide regarding the Electronic Invoice and Esterometro. This includes the following changes: 

• Further information relating to a new document type, TD28 
• Further clarity around the usage of an existing document type, TD19. 

Tungsten Network has successfully enabled the new document type TD28.  These changes have taken effect from 1 October 2022.  The new documentation can be found via the following link:   https://www.agenziaentrate.gov.it/portale/documents/20143/451259/Guida_compilazione-FE-Esterometro-V1.8.pdf/c0aca469-4c4a-9b8d-048c-398412435c26 

Natural gas and energy providers – VAT mitigation Decree – Law No.80 has proposed several mitigation measures specifically designed to assist natural gas and energy providers.  The following measures have been anticipated:  

• Reduced VAT by 5% for natural gas supplies of household and industrial use to apply the consumption invoices filed in the third quarter of 2022 
• Conserving the miscellaneous charges for the natural gas sector enforced in the second quarter of 2022 
• Zeroing charges in the electricity sector for the third quarter of 2022 
• Providing some incentives for electricity and gas.   

New technical specifications The Revenue Agency in Italy has announced a new version of the Technical Specifications (1.7.1) for electronic e-invoicing in Italy.  These are applicable from 1st October 2022.   The Technical Specifications are regularly updated with a view to improving the e-invoicing process, as well as highlighting changes to the invoice layout, amongst other modifications.    Changes to the Technical Specifications include the introduction of a new document type (TD28), relevant for purchases from San Marino, as well as the completion of a new field for certain transactions exempt from stamp duty.    Tungsten Network is analysing the changes to ensure we are compliant with version 1.7.1 of the new technical specifications from 1st October 2022. 

Extension of reduced VAT rates Inflation continues to soar across Europe, driving governments to address their fiscal operations and enact temporary VAT cuts. Considering rising inflation across the country, Italy has further extended the temporary VAT reduction on gas until 30 September 2022.

Increase in stamp duty deferment threshold for e-invoices The Italian tax authorities have introduced some changes relating to the stamp duty deferment threshold for e-invoices. Semplificazioni Law Decree no. 73/2022 states that for e-invoices issued with effect from 1 January 2023, the threshold for deferment of payment of stamp duty for the first two quarters of the year will be raised from 250 Euros to 5,000 Euros. This will affect the timeframes within which stamp duty can be paid. Provided the amount related to stamp duty on electronic invoices issued in the first quarter does not exceed 5,000 Euros, it can be paid within the deadline for the payment of the second quarter liability (i.e. 30 September). If the amount relating to stamp duty on electronic invoices issued in the first and second quarters does not exceed 5,000 Euros, it may be paid by the deadline for payment of the third quarter liability (i.e. 30 November).

Extension of e-invoicing mandate scope Italy has extended the scope of taxpayers subject to mandatory e-invoicing in line with the following:

• 1^st July 2022: E-invoicing is mandatory for all businesses exceeding a turnover of 25,000 in the preceding year
• 1^st January 2024: E-invoicing is mandatory for remaining businesses.

Tungsten Network implemented the e-invoicing solution to facilitate domestic transactions in Italy via the Sistema di Interscambio (SdI) in January 2019.

Introduction of the plastic tax Multiple countries are enacting legislation with a distinctly ‘green’ agenda. More recently, this year in April 2022 we oversaw the introduction of the plastic tax in the United Kingdom. Italy is enacting similar legislation with the introduction of the plastic tax on 1^st January 2023. In many respects analogous to its UK counterpart, it aims to incentivise the use of recycled plastic. The below provides a summary of the main changes:

• The tax applies to manufactured products for single use (MASCI)
• All plastic is included with some exceptions (including compostable plastics, recycled plastic and plastic used for medical ends)
• As in the UK, the tax is not set as a fixed percentage but will be charged at 450 Euros per tonne of plastic
• The tax must be reported quarterly.

Spain is also enacting similar legislation. Please refer to this month’s Spain compliance updates for further information.

Expansion of scope of e-invoicing mandate We have published extensive updates on the obligation for taxpayers to report cross-border invoices to the Sistema di Intercambio (SdI), which becomes mandatory from 1^st July 2022. The Draft Law Decree PNRR 2, the National Recovery and Resilience Plan, was approved on 13 April 2022. This has expanded the scope of the taxpayers now obligated to report their cross-border invoices to the SdI from 1^st July 2022. Amongst the groups now subject to the e-reporting of cross-border invoices are:

• Taxpayers who adopt the flat rate regime
• Amateur sports associations and third sector entities with a revenue of up to 65,000 Euros

Further VAT-related measures in response to Covid-19

The last two years have shown the dramatic effect of the Covid-19 pandemic on the tax world. VAT-related measures as a direct result of the pandemic still continue.

Italy introduced Decree Law No 215, which states that any goods and services supplied to the government under EU law, will be exempt from VAT, if these goods and services are used to combat Covid-19.

2022 budget confirms delay to plastic and sugar tax and reduction in gas VAT rate

In the Italian 2022 budget, which has now been approved, Italy has delayed a tax to be applied to both plastic and sugar until 1st January 2023.
In the budget, Italy has also stated that gas for domestic and industrial production is cut to 5% between 1 January and 31 March 2022. This continues the 5% reduced rate that was applied from October 2021 to December 2021.
With inflation a widespread concern across Europe, we can expect other European states to adopt similar measures.

New e-archiving obligations from January 2022 now in force

New e-archiving obligations were introduced in Italy on 1st January 2022. These new obligations relate to the training, management and storage of documents issued by the Agency for Digital Italy, as well as specific information relating to metadata. These guidelines replace previous archiving regulations on the storage of tax documents. Tungsten Network is compliant with all archiving obligations further to the introduction of these changes.

VAT electronic cash register reporting changes

There are new VAT obligations applicable to certain retailers in Italy from 1 January 2022. These new obligations were originally scheduled for 1 October 2021 but delayed due to the Covid-19 pandemic.

All retailers who are affected need to update their electronic registers for the transmission of daily transactions and VAT liabilities, resulting in greater visibility for tax authorities. Cash machine producers can carry out the required adjustments.

Retailers affected are:

• All retailers subject to the 2019 internet-linked cash register transaction reporting* (see below);
• Both residents and non-residents;
• With a turnover of more than 400K Euros per year.

*In 2019, Italy introduced new regulations which meant certain retailers were required to transmit their daily takings to the Italian Internal Revenue Agency via the internet for goods and services sales with VAT applied. For businesses with a turnover of over 400K Euros per year, this requirement was introduced from July 2019; it was extended to other businesses on 1 January 2020.

EU Commission approval to extend B2B e-invoicing mandate until end of 2024

The derogation from Articles 218 and 232 of the VAT Directive meant Italy could continue to mandate e-invoicing until 31 December 2021. Italy has requested to apply for an extension to apply the B2B e-invoicing mandate until 2024.
On 13 December 2021, the European Commission approved the authorisation for Italy to continue to apply the B2B mandate until the end of 2024.

Italy delays SDI cross-border invoice reporting to July 2022

It is very likely that Italy will delay the introduction of the mandatory e-reporting of cross-border transactions to the SDI to July 2022 (from January 1, 2022).
The delay was proposed in a very recent draft amendment to the tax law that arranges the withdrawal of the Esterometro Reporting and the transition to cross-border invoice reporting to the SDI. The amendment has been passed by the Italian Senate and is now in the hands of the Tax Chamber for final approval. This is generally seen as a formality as the amendment needs to pass into law by December 20.
Tungsten Network is investigating how the delay impacts customers that seek to go live with the cross-border invoice reporting ahead of July 2022 and we invite you to check regularly for the latest updates here.

Italy intends to extend and expand e-invoicing mandate

Italy would like to obtain a permit from the European Union to extend the obligation of electronic invoicing until the end of 2024. Furthermore, plans are being made to expand the range of subjects also to one and a half million professionals, self-employed and VAT numbers on a flat-rate basis, currently excluded.

Further extension of new SDI rules

The use of Italy’s new Fattura XML format was originally mandatory from January 1, 2021 but was delayed until end of February 21. However, Italy has now again extended for the third time the newest rules relating to SDI invoices, The date from which the usage of the Fattura XML 1.6 becomes obligatory has been moved from 28th February 2021 to June 2021.
Tungsten Network has been ready for the new XML format from the voluntary introduction in September 2020.

Vorläufiges Haushaltsgesetz 2021 treibt die Änderungen des Mandats bezüglich elektronischer Rechnungsstellung voran

Das Haushaltsgesetz 2021 (im Entwurf) beinhaltet Änderungen an den Anforderungen zur elektronischen Rechnungsstellung in Italien, die – theoretisch – ab 2022 gelten sollen:

• Dazu gehört die Verpflichtung der Übermittlung von Transaktionen mit Steuerausländern (Entitäten, die keine Mehrwertsteuer in Italien abführen) an das Sistema di Interscambio (SdI). Dies bedeutet konkret, dass das Formular zur Meldung von Auslandsumsätzen (Esterometro) nicht mehr verwendet wird.
• In FATTURA XML könnten dafür neue Felder und zusätzliche Prüfungen für Lieferungen mit Absichtserklärung verwendet werden.

Vorläufiges Haushaltsgesetz 2021 treibt die Änderungen des Mandats bezüglich elektronischer Rechnungsstellung voran

Das Haushaltsgesetz 2021 (im Entwurf) beinhaltet Änderungen an den Anforderungen zur elektronischen Rechnungsstellung in Italien, die – theoretisch – ab 2022 gelten sollen:

• Dazu gehört die Verpflichtung der Übermittlung von Transaktionen mit Steuerausländern (Entitäten, die keine Mehrwertsteuer in Italien abführen) an das Sistema di Interscambio (SdI). Dies bedeutet konkret, dass das Formular zur Meldung von Auslandsumsätzen (Esterometro) nicht mehr verwendet wird.
• In FATTURA XML könnten dafür neue Felder und zusätzliche Prüfungen für Lieferungen mit Absichtserklärung verwendet werden.

Italien verlängert Frist für elektronische B2B-Rechnungsstellung bei Kraftstofflieferungen

Die italienische Regierung hat verkündet, dass Kraftstofflieferanten ab 1. Januar 2019 wie alle anderen Unternehmen mit italienischer Umsatzsteuernummer B2B-Rechnungen elektronisch übermitteln müssen.

Die EU erteilt eine Ausnahmegenehmigung für die verpflichtende elektronische B2B-Rechnungsstellung in Italien.

Die Europäische Kommission erteilt eine Ausnahmegenehmigung der Artikel 218 und 232 der Richtlinie 2006/112/EG für Italien, da diese mit der B2B-Vorschrift in direktem Konflikt standen. Die italienische Vorschrift kann nun im Einklang mit allen EU-Gesetzen eingeführt werden.

Italien schreibt elektronische B2B-Rechnungsstellung vor

Die italienische Regierung bestätigt, dass die elektronische B2B-Rechnungsstellung ab dem 1. Januar 2019 obligatorisch sein wird (in einigen Fällen, z. B. für Kraftstofflieferanten oder Subunternehmer von Geschäftspartnern öffentlicher Verwaltungsbehörden, gilt die Richtlinie ab Juli 2018).

Italien setzt die EU-Richtlinie 55 zur Mehrwertsteuer um

Die EU-Richtlinie 55 zur Mehrwertsteuer verpflichtet alle EU-Behörden dazu, elektronische Rechnungen zu empfangen oder zumindest darzulegen, wie sie dies ab dem 27. November 2018 umsetzen werden.