Invoicing for e-commerce in Italy: How does it work?

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  1. Introduction
  2. Differences between direct and indirect e-commerce
  3. Invoicing for indirect ecommerce
    1. B2C indirect e-commerce invoicing with Italian individuals
    2. B2C indirect e-commerce invoicing with individuals from other EU countries
    3. B2C indirect e-commerce invoicing with individuals from non-EU countries
    4. Invoicing for B2B indirect e-commerce
  4. Invoicing for direct e-commerce
    1. Transactions included in electronic services
    2. Transactions excluded from electronic services
    3. Is it mandatory to issue an invoice in direct ecommerce?
    4. VAT territoriality in direct e-commerce
  5. Creating electronic invoices for e-commerce

E-commerce is gaining popularity in Italy for several reasons: reduced costs due to the lack of physical facilities, expansion into new markets by reaching customers in remote areas, increased brand visibility online compared to other advertising methods, and rising tendencies of customers to shop online.

If you plan to launch an online e-commerce business or expand internationally, there are several requirements to consider, including adherence to e-commerce invoicing regulations. When is invoicing mandatory? What’s the difference between direct and indirect e-commerce? How do you create an invoice for e-commerce? We explore all of these topics in this article.

What’s in this article?

  • Differences between direct and indirect e-commerce
  • Invoicing for indirect e-commerce
  • Invoicing for direct e-commerce
  • Creating electronic invoices for e-commerce

Differences between direct and indirect e-commerce

The regulatory invoicing requirements for e-commerce activities differ based on whether they involve direct or indirect e-commerce. These requirements also vary based on the nature of the recipients – private customers (B2C) or business operators (B2B) – and the location of the recipient, whether in Italy, another EU country, or outside the EU.

Here’s the difference between direct and indirect e-commerce:

  • Indirect e-commerce (tangible goods): The online purchasing and selling of physical goods (such as clothing, household items, books, accessories, and food) that companies subsequently ship to provided addresses
  • Direct e-commerce (intangible goods): The buying and selling of virtual goods (such as subscriptions, hosting services, software, and web domains) with the entire transaction occurring electronically, including the delivery process

Invoicing for indirect ecommerce

For value-added tax (VAT) purposes, the Italian tax office classifies transactions conducted through indirect e-commerce as a supply of goods and makes a distinction between:

  • Sales to individuals (B2C indirect e-commerce)
  • Sales to other businesses (B2B indirect e-commerce)

In the case of B2C indirect e-commerce, we must further distinguish between individuals:

  • In Italy
  • From other EU countries
  • From countries outside the EU

B2C indirect e-commerce invoicing with Italian individuals

B2C indirect e-commerce transactions are subject to distance selling regulations and, as a result, are exempt from the obligation to issue:

  • An invoice (unless the customer requests it)
  • A receipt or tax receipt

However, you must record daily sales receipts in the special register for VAT settlement, which is mentioned in Article 24 of Presidential Decree No. 633/1972.

B2C indirect e-commerce invoicing with individuals from other EU countries

The Italian tax authority treats indirect e-commerce transactions between EU counterparties as distance sales. According to the VAT territoriality requirement, VAT taxation takes place in the EU state where a business delivers the goods, with the option to join the VAT One Stop Shop (VAT OSS) regime. When a business violates this regulation, the tax authority levies VAT in the EU state where the business shipped those goods if the supplier:

  • Has established themselves in only one EU member country
  • Has not opted for taxation at the destination
  • Has not exceeded the protection threshold

In fact, if the total intra-EU distance sales in the EU did not exceed €10,000 (the protection threshold) in the preceding calendar year, the VAT imposed is that of the country of departure. This can happen directly or through the appointment of a tax representative. However, suppliers can opt for the simplified OSS process.

If the supplier exceeds the threshold of €10,000 (total net value of VAT) within a calendar year, it will be subject to the standard VAT taxation based on the destination country of the goods.

To determine if you will exceed the €10,000 threshold, you can add together the total values, excluding VAT, of the following transactions made to private customers throughout the year:

  • Intracommunity distance sales of goods
  • Telecommunication, broadcasting, and electronic services (TTE) provided to private individuals in all member states except the supplier’s home country

For example, say a business in Italy provides €4,000 of TTE services to individuals in France. The same business also makes €9,000 in distance sales of goods from Italy to Germany. Since the transactions exceed the €10,000 threshold, the individual’s country bears the tax burden of any subsequent transactions.

B2C indirect e-commerce invoicing with individuals from non-EU countries

While issuing an invoice isn’t mandatory, it’s advisable since customs frequently request it for export purposes. In this case, you must issue a standard tax invoice, exempt from VAT, in accordance with Article 8 of Presidential Decree 633/72.

Goods shipped through customs incur VAT and duties as per the regulations of the destination country. Following customs clearance and delivery, registering the Movement Reference Number (MRN) documents is important. This certification ensures the goods have exited the EU, confirming you have met all VAT and customs requirements.

Invoicing requirements for B2C indirect e-commerce
Customer
VAT territoriality
Invoicing requirement
Italian private individual Italy No obligation to issue invoice or receipt. Obligation to record daily sales receipts in the appropriate register.
EU private individual EU destination country (with the option to join the OSS scheme): If an Italian supplier exceeds the €10,000 threshold during the calendar year Invoice issued with VAT from the EU destination country, registered separately. Mandatory direct identification or appointment of tax representative in the destination country.
EU private individual EU country of departure: If an Italian supplier does not exceed the €10,000 threshold during the calendar year or if they have not chosen to apply VAT in the EU country receiving the goods. No obligation to issue invoice or receipt. Obligation to record daily sales receipts in the appropriate register.
Non-EU private individual Non-EU country: Export not taxable for VAT purposes under Article 8 of Presidential Decree No. 633/1972. While issuing an invoice isn’t mandatory, it’s advisable since customs typically request it for export purposes. In this case, issue a standard tax invoice, exempt from VAT, in accordance with Article 8 of Presidential Decree 662/72. Obligation to register (register of receipts, or register of invoices issued, or both).

Invoicing for B2B indirect e-commerce

For all B2B transactions, the business must issue an electronic invoice. This includes sales to companies in Italy, other EU countries, and non-EU countries.

In B2B transactions, the territoriality requirement is relevant because VAT is not applied in the country of departure but is instead applied in the country of destination using that country’s taxation system.

When making sales to another EU country, an Italian business must verify the other EU business’s VAT identification number that it provides using the VAT Information Exchange System(VIES) database.

For the export procedure to non-EU countries, there are no distinctions based on the nature of the customer (whether an individual or a business), so the terms regarding the sale of goods to individuals from non-EU countries apply.

Invoicing for direct e-commerce

Direct e-commerce transactions are commercial transactions conducted solely through electronic means, involving the supply of intangible virtual products (such as software, data, images, and music) recipients obtain via downloads.

As stated in Article 7, Paragraph 1 of EU Regulation No. 282/2011, electronically supplied services “include services which are delivered over the Internet or an electronic network and the nature of which renders their supply essentially automated and involving minimal human intervention, and impossible to ensure in the absence of information technology.”

Transactions included in electronic services

Electronic services include:

  • The supply of digitised products, including software and changes to or upgrades of software
  • Services providing or supporting a business or personal presence on an electronic network, such as a website or webpage
  • Services automatically generated from a computer via the internet or an electronic network in response to specific data input by the recipient
  • Fee payment to gain the right to put goods or services up for sale on an internet site operating as an online marketplace where potential customers make bids using an automated procedure
  • Internet service packages
  • All other services listed in Annex I to EU Regulation No. 282/2011

Transactions excluded from electronic services

According to Article 7, Paragraph 3 of EU Regulation No. 282/2011, the following services are outside the scope of electronic services:

  • Broadcasting and telecommunication services
  • Goods purchased online
  • CD-ROMs (including video games), printed material (books, newspapers), audio and video cassettes, and DVDs
  • Services of professionals supplied via email
  • Offline physical repair services of computer equipment
  • Advertising and telephone helpdesk services
  • Conventional auctioneers’ services reliant on direct human intervention
  • Online booking of admission tickets to events or hotel stays

Is it mandatory to issue an invoice in direct ecommerce?

For B2C direct e-commerce, issuing an invoice is not mandatory unless the individual specifically requests it. It’s also not mandatory to issue a till receipt or full receipt. However, for VAT settlement, you must record daily sales receipts in the special register, as mentioned in Article 24 of Presidential Decree No. 633/1972.

With B2B e-commerce, however, you must always issue an invoice.

General invoicing requirements for direct and indirect e-commerce
B2C
B2B
Indirect e-commerce
Invoice not mandatory, unless expressly requested by the customer Invoice mandatory
Direct e-commerce
Invoice not mandatory, unless expressly requested by the customer Invoice mandatory

VAT territoriality in direct e-commerce

Regarding direct e-commerce services, both B2B and B2C sales are subject to VAT in the destination country, regardless of where the supplier is established (an EU or non-EU country).

The distinction between B2B and B2C relationships exists solely for the purpose of VAT application, specifically:

  • In B2B relationships, the supplier must issue an invoice without applying VAT, as these transactions are non-taxable under Article 7-ter of Presidential Decree 633/1972. The customer is then responsible for issuing and recording the invoice received in accordance with the reverse-charge system.
  • In B2C relationships, suppliers (EU or non-EU) pay the tax directly after registering for VAT in the customer’s EU country, using the special OSS regime.

Creating electronic invoices for e-commerce

In the cases of mandatory invoicing for e-commerce mentioned above, businesses must transmit the invoice through the Exchange System (SDI) of the Agenzia delle Entrate (the Italian Revenue Agency). Businesses must use electronic invoicing software to do this, including paid software offered by market providers or the free tools the Agenzia delle Entrate provides.

After that, you must compile the electronic invoice with the following data:

  • Date of issue
  • Relevant sequential number
  • Seller’s tax information
  • Buyer’s tax information
  • Product or service supplied
  • Amount
  • VAT (if applicable)
  • Recipient code

The recipient code is the electronic address the SDI uses to identify the invoice recipient or the certified email (PEC) address. It consists of seven digits for B2B or B2C invoices and six digits for invoices issued to a public entity. Conversely, if you are issuing an invoice to a private individual without a VAT number, you must enter the code “0000000” in the Recipient Code field and provide only the Tax Code.

As your business expands, managing the invoicing process for e-commerce can become increasingly complex. 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 customers pay 87% of Stripe invoices within 24 hours. Additionally, through collaboration with third-party partners, you can also use Invoicing for electronic invoicing.

The content in this article is for general information and education purposes only and should not be construed as legal or tax advice. Stripe does not warrant or guarantee the accuracy, completeness, adequacy, or currency of the information in the article. You should seek the advice of a competent lawyer or accountant licensed to practise in your jurisdiction for advice on your particular situation.

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