How to prepare your business for Italy’s new cross-border e-invoicing mandate

As governments worldwide work to improve their fiscal health and ensure their Treasury records taxes correctly, mandated e-invoicing becomes increasingly common.

Leading the way in Europe, Italy was the first country to implement countrywide mandatory B2B e-invoicing in 2019. Now, Italy has introduced new regulations regarding cross-border invoicing, which will come into effect on July 1st, 2022. Ahead of the upcoming changes, since January 1st, Tungsten Network allows Italian businesses to report 100% of their cross-border invoicing to make the transition easier and faster.

This article investigates how the new regulations will affect cross-border invoicing in Italy and examines how businesses can prepare for the changes.

How will Italy’s e-invoicing mandate change?

Before the new mandate, domestic invoices had to be sent to the Italian Revenue Agency through Sistema di Interscambio (SDI) and cross-border invoices via the periodic tax reporting scheme, Esterometro.

However, Esterometro will become obsolete by July 2022 as Italy plans to make real-time reporting via SDI mandatory for cross-border transactions as well. Italian businesses will no longer be required to file a sale and purchases report through Esterometro for these transactions, since everything will be processed electronically through the SDI platform.

Which transactions do the new rules apply to?

The new mandate will apply to the following transactions:

Intra-EU acquisitions of goods
Intra-EU supplies of goods
Imports, if the related customs bills aren’t available
Exports, if the related customs bills aren’t available
Domestic acquisitions of goods from entities established outside Italy, subject to the reverse-charge mechanism
Domestic sales of goods to entities established outside Italy
Services rendered to entities established outside Italy
Services purchased from entities established outside Italy

New deadlines and potential penalties

As a result of the new mandate, deadlines for filing reports will become much tighter:

Details of supplies to customers not established in Italy will have to be transmitted via the SDI portal. The timeframe for this depends on the type of invoice:
- 12 days from the tax point for ‘immediate’ invoices
- The 15th day of the following month for deferred invoices
Details of purchases from non-established suppliers will have to be transmitted via the SDI portal by the 15th day of the month following when the supplier invoice has been received or when the transaction has taken place.

Starting July 1st, the penalty for transactions carried out in the incorrect format is €2 per invoice, up to a maximum of €400 per month.

However, if the transmission is made within 15 days of the deadline or if the data is correctly transmitted within the same deadline, the penalty is reduced by half to up to €200 per month.

For more details about the new regulations, visit Italy’s Gazzetta Ufficiale.

How can businesses prepare for the change?

As e-invoicing surges worldwide, businesses must keep up with new laws, mandates and compliance requirements. To do so, companies will need to set up specific procedures to determine compliance with the e-invoicing and reporting system. In addition, organisations should consider conducting specific and periodic checks to ensure continued compliance with the standing regulations.

If the specific IT skills and tax knowledge required to perform these tasks can’t be found internally, companies are advised to assign these tasks to a third-party provider.

Tungsten Network can offer a stable solution that allows companies to report 100% of Italian sales and purchase invoices to SDI, including domestic, cross-border and intercompany invoices ahead of the deadline.

Businesses will benefit from having one provider handling and pre-validating all their Italian invoices before they are reported to SDI. This system reduces errors, improves recording and streamlines the entire reporting process. In addition, Tungsten Network offers compliant archiving for all invoice types, offering reassurance and peace of mind.

Is your business ready to face the new cross-border mandate?

If the following statements apply, your company should be adequately prepared for the new Italian mandate:

Up to date with changing laws and regulations
Possesses the necessary information to adapt in a timely manner
The existing system can ensure connectivity with different government platforms
The current system in use guarantees the support of all possible business document types and formats, which often differ from country to country
Can manage the complexity and multiplicity of solutions and providers

Prepare your business for the new mandate with the Tungsten Network

Tungsten Network is committed to being the world’s most trusted businesses transaction network and offering Italian businesses the opportunity to adopt the new cross-border reporting six months ahead of its mandated introduction.

Discover how your business can achieve world-class performance. Schedule a free consultation today.