Article 21, Paragraph 2 of Presidential Decree 633/1972 outlines the data businesses in Italy must include on invoices and, therefore, also on electronic invoices. This mandatory information includes, for example, the date of issue, sequential number, provider, client details, etc.

In this article, we explore whether it is mandatory to indicate the payment method on an e-invoice and the procedures to follow.

What’s in this article?

• Including payment method on electronic invoices
  
• Electronic invoice payment method codes
  
• Cash as a method of payment for electronic invoices
  
• Instalment payment method for electronic invoices
  

Including payment method on electronic invoices

Among other information, the mandatory data on an invoice includes:

• Date of issue

• Sequential number that uniquely identifies the invoice

• Provider and customer details (i.e. company name, first and last name, residence or domicile, and value-added tax identification number [VAT ID] or tax code)

• Description of the product or service

• Quantity and rate

• Tax amount and taxable amount

However, there is no obligation to indicate the payment method on an electronic invoice – it’s optional. In fact, if there is an error in indicating the payment method on the e-invoice, it is always possible to change it later, even through a simple email.

However, indicating the payment method on an e-invoice can benefit the customer, as it simplifies accounting and schedule management. It’s also a good idea to offer multiple payment options. In fact, allowing the customer to choose their preferred payment method can help facilitate payment and ensure faster receipt.

Electronic invoice payment method codes

Electronic invoicing software typically includes the necessary functionality to add one or more payment methods to your account. It is also possible to associate one or more payment methods with the same customer. It’s important to know how companies indicate payment methods on electronic invoices in Italy. The methods you can use to pay an invoice and the codes to indicate them are:

Cash as a method of payment for electronic invoices

Cash remains a fairly common payment method in Italy, despite the rapid growth of digital payment methods. It is possible to pay an electronic invoice in cash, but it is subject to a specific amount limit. As per Italian regulations, revised in the Budget Law 2023 and still applicable as of 2024, the cash payment limit is €4,999.99. For any amount exceeding that limit, a customer must use a traceable payment method instead. The Italian tax administration prefers that customers and businesses pay electronic invoices using traceable methods.

Additionally, it is important to remember that with electronic invoicing, the Italian Revenue Agency (Agenzia delle Entrate) has full visibility over taxpayer transactions, allowing for more frequent and rigorous controls over financial movements. If the cash payment exceeds this maximum amount, the Italian Revenue Agency can impose administrative penalties.

Exception to the limit for cash payments

However, there is an exception to this limit for supplies of goods or services. The payment cannot exceed €15,000 if the following conditions are met:

• Retailers and travel and tourism agencies produced the goods.

• Retailers and travel and tourism agencies supplied the goods to individuals who are not citizens of Italy, the EU, or the European Economic Area and reside outside Italian territory.

Before claiming the exception, the supplier of the goods or the service provider must submit prior notice of adherence to the exemption to the Italian Revenue Agency.

After that, at the time of purchase, they must:

• Acquire a photocopy of the customer’s passport

• Obtain self-certification from the customer stating they are not an Italian citizen and reside outside the country

By the first working day following the transaction, the goods or services provider must deposit the collected cash into their bank account. They must also provide the financial operator with a copy of the prior notice previously submitted to the Italian Revenue Agency.

Instalment payment method for electronic invoices

According to the commercial agreements between the supplier of the goods or services and the customer, it is possible to arrange for a customer to pay the invoice in instalments. Suppliers can select the option for instalment payments in the electronic invoicing software under the “payment terms” section. After that, they must specify the:

• Number of instalments

• Start date of the first instalment

• Time interval between instalments

• Payment amount of each instalment

Properly setting up the instalment plan in an electronic invoice helps the issuer maintain control and serves as a reminder to the invoice recipient. Additionally, if the electronic invoicing software integrates with the accounting system, issuers can view and update the remaining balance each time the customer makes a payment.

Managing the invoicing process can become more complex for businesses, particularly as they expand. Some tools can assist in automating this process, such as Stripe Invoicing, a comprehensive and scalable invoicing platform that allows you to create and send invoices for both one-off and recurring payments without needing to write any code. With Invoicing, you can save time and get faster payments, as participating businesses are able to collect 87% of Stripe invoices within 24 hours. Additionally, through collaboration with third-party partners, you can also use Invoicing for electronic invoicing.

For instalment payments, even if the total amount exceeds the cash payment threshold, a customer can still use cash as the payment method for electronic invoices, as long as each instalment does not exceed the threshold amount.