Italy’s “Fattura Elettronica” for B2B and B2C businesses

Italy --> The use of e-Invoices in the public sphere has been mandatory since June 2014. Since January 2019, every business is required to issue invoices electronically using the centralized “Sistema de Interscambio” (SdI).

Find out more about the new Italian invoicing requirements in this article and feel free to leave a comment if I’m missing any relevant information.

From public entities to private businesses

E-invoicing for the supply of goods and services to public entities was put in place in 2014. As it was a great success, and in order to fight VAT evasion, Italy's Public Administration now requires all economic operators to submit invoices in an electronic format to the government's SdI for real-time verification and validation.

Once the SdI validates the invoice format and confirms the issuing organization, the invoices are forwarded to customers. In the event of refusal due to non-compliance with the invoice format or any other specific technical details relating to digitalization, the seller is notified as soon as possible.

E-invoicing has great potential

The mandatory e-invoice is an effective tactic to combat tax evasion. In the first 6 months after the introduction of the e-invoice rule, the Italian Revenue Agency has successfully processed around 1 billion documents and 4 billion Euros have been raised thanks to SdI e-invoicing.

The positive impact of the measure is inspiring other members of the European Union to set up mandatory e-invoicing systems, and businesses should be prepared for it.

Invoice format requirements: FatturaPA format

The FatturaPA is an electronic invoice based on the decree provided for by Italian Law number 633, 1972, article 21, subsection 1, and this is the only format accepted by the SdI.

More specifically, the FactturaPA has to:

  1. Be structured as an XML file (Extensible Markup Language),
  2. Contain an electronic signature in order to guarantee the user’s authenticity and the integrity of the contents.

Businesses can add the electronic signature by using one of the certifiers in the list of authorized certifiers published on the “Agenzia per l'Italia Digitale (AGID)” website.

Learn more about the FatturaPA here.

The submission process

Files meeting the requirements can then be submitted to the SdI in different ways:

  • An XML file per invoice,
  • An XML file for a batch of invoices,
  • A ZIP file containing XML files under the two previously mentioned types.

After preparing and signing the XML file, the submission must be done exclusively via the Exchange System. There are five channels of communication between the issuer and the SdI:

  1. Certified Electronic Email (CEM) → In Italian, this is the Posta Elettronica Certificata (PEC). Using this channel does not need any accreditation with the Exchange System. It works for sending files no larger than 30Mb.
  2. Sending through the web → This channel allows a FatturaPA file or an archive file transmission to the Exchange Systems via a web interface. The issuer most hold Entratel or Fisconline credentials or have a National Service Card (NSC). Files must not be bigger than 5Mb.
  3. Using the SdICoop → This is a collaborative transmission service application that allows anyone to send the FatturaPA to the Exchange System and receive messages related to the files. See the instructions here.
  4. Using the SdIFtp → This service is used for bulk exchange of documents and is based on the FTP (File Transfer Protocol) method. See the instructions here.
  5. Using the SPCool → This channel is dedicated to all who issue invoices to public entities and need to use the Public Connectivity System (PCS).

Learn more about transmission channels here.

Are any intermediary solutions out there?

Today there really aren’t a million choices on the market that are able to integrate with payment providers to automate invoice generation and transfers to the SdI. Plus, those available are generally large ERP and accounting firms, so the implementation process is heavy and slow.

As noted previously, the implementation and maintenance of a transmission channel can be complicated and tedious, especially for companies that do not have the technical skills to do so or that want to stay focused on their core business.

But there is good news! Octobat is going to support the Italian e-invoicing requirements this autumn. We’ll be able to issue XML compliant invoices, add an electronic signature to them, and communicate with the SdI via the Exchange System with just a click. Octobat can be implemented via direct integration with Stripe, Paypal, and more using a RESTful API.

Get in touch if you’re interested in learning more about using Octobat for e-invoicing in Italy.