The implementation of mandatory electronic invoicing, or e-invoicing, in Italy is part of a broader effort to combat tax evasion. Italy was the first country in Europe to implement this requirement. But what are electronic invoices, and who has to use them? How do businesses issue e-invoices? And what are the penalties for failing to comply with electronic invoicing requirements? We’ll discuss these topics below.

What’s in this article?

• What is an electronic invoice?
  
• Who has to issue electronic invoices?
  
• Who does not have to issue electronic invoices?
  
• How do you issue an electronic invoice?
  
• Obligation to retain electronic invoices
  
• Penalties for noncompliance
  

What is an electronic invoice?

Mandatory electronic invoicing in Italy came into effect on January 1, 2019, under Law No. 205, which was introduced on December 27, 2017. An electronic invoice is a digital invoice created by using XML; in Italy, it must be created in accordance with Agenzia delle Entrate directives, and transmitted through the designated Exchange System (Sistema di Interscambio or SdI).

The Exchange System checks that the invoice includes the mandatory tax information and the electronic address—either the recipient code or certified email (Posta Elettronica Certificata or PEC)—where the customer wants the invoice sent. It also validates both the supplier’s value-added tax (VAT) number and the customer’s VAT number or tax code. If the verification is successful, the Exchange System delivers the invoice to the recipient and sends the business a receipt indicating the date and time of delivery.

Who has to issue electronic invoices?

As of January 1, 2024, mandatory electronic invoicing applies to all VAT holders (previously, some were exempt), regardless of the tax regime they adopt or the revenue threshold they reach. Initially, with the Budget Law 2018 (Law No. 205 established on December 27, 2017), electronic invoicing obligations applied only to public entities. However, the obligations were expanded on January 1, 2019 to include the supply of goods and services between individuals/businesses who are residents of, or established or identified (i.e., are registered for VAT) in Italy.

Further, as of 2023, Legislative Decree 36/2022—which implements measures for the National Recovery and Resilience Plan (PNRR)—removed exemptions from mandatory electronic invoicing for:

• Individuals with a business under the “privilege regime” or minimum regime (Article27, paragraphs 1 and 2, of Legislative Decree 98/201)
  
• Individuals with a business under the flat-rate regime (ex Article 1, paragraphs 54 to 89, of Law No. 190/2014)
  
• Amateur sports associations, specifically those that have opted for the provisions outlined in Law no. 398/1991, Articles 1 and 2, and who, in the prior tax period, generated income from commercial activities totaling a maximum of €65,000 (Article 10, paragraph 1 of Legislative Decree No. 119/2018)
  

Who does not have to issue electronic invoices?

The following taxpayers are exempt from mandatory invoicing in 2024:

• Individuals who issue invoices to other individuals who are not residents or fiscally established in Italy, specifically from foreign countries.
  
• Healthcare providers who send data to the Healthcare Insurance System.
  
• Individuals who do not send data to the Healthcare Insurance System, but who provide healthcare services to individuals.
  

How do you issue an electronic invoice?

To create and issue an electronic invoice, you will need special software. There are various types of tools available on the market, as well as free resources provided by the Agenzia delle Entrate. These resources include:

• A web-based process for preparing and sending electronic invoices, accessible through the Invoices and Receipts (Fatture e Corrispettivi) portal
  
• PC software available on the Agenzia delle Entrate site that allows you to create and save electronic invoices
  
• An app called “FatturAE” available for iOS and Android devices, which you can use to send electronic invoices
  

When filling out an invoice, you must enter the customer’s data, including:

• Business name
  
• VAT number or tax code, if it’s an individual
  
• Customer’s PEC address or recipient code. The recipient code identifies the invoice recipient, which helps the Exchange System deliver it correctly. For invoices between private parties—either B2B or B2C—the code consists of seven digits. There are six digits for public entity invoices. If the customer is an individual taxpayer without a VAT number, you enter the standard code “0000000” in the “CodiceDestinatario” field and provide the tax code.
  

Finally, you must include the invoice data:

• Unique sequential number
  
• Date
  
• Description of products or services, the number of units sold, price, and VAT code
  
• Possible addition of a digital stamp duty for transactions that didn’t charge VAT (e.g., reverse charge)
  
• Payment information (e.g., payment method, due date, any bank details, etc.)
  

The Exchange System checks that the invoice includes the necessary tax information and verifies the validity of the supplier’s VAT number, as well as the customer’s VAT number or tax code. Once the checks are complete, the SdI delivers the invoice to the customer and sends a delivery receipt to the supplier.

If you want to issue an invoice, you must first send it to the Exchange System. Be sure not to confuse the issue date with the date shown in the “Date” field on the invoice itself.

Obligation to retain electronic invoices

You must store electronic invoices in digital format (also called “conservazione sostitutiva,” or “substitute conservation,” because it’s a substitute for a paper invoice). This must be done for a minimum of 10 years, and the requirement applies to both issuers and recipients. Note that this is a specific procedure governed by law (Digital Administration Code or CAD), so it’s not sufficient to simply save the document as a PDF file on your computer.

Taxpayers can use the service provided by the Agenzia delle Entrate through the dedicated “Invoices and Receipts” portal, which will store invoices for a period of 15 years. Alternatively, they can use certified private operators who will manage the entire process and store invoices according to the law’s minimum of 10 years.

Penalties for noncompliance

Penalties for failing to issue an electronic invoice or issuing one late

The deadlines for issuing electronic invoices differ for immediate and deferred invoices.

• For immediate invoices: 12 days from the date on which the transaction occurred
  
• For deferred invoices: By the 15th day of the following month
  

But what are the consequences of late issuance of an electronic invoice, omitted invoices, or errors? In these scenarios, taxpayers can face administrative penalties.

The rules on penalties are specified in Article 6 of the Legislative Decree of December 18, 1997, No. 471 (in the version currently in force). Here they are, as amended from September 1, 2024:

• If you omit an invoice, issue it late, or if the invoice contains errors: 70% of the VAT associated with the taxable amount that you did not properly document or record, with a minimum fine of €300
  
  • If the omission or error does not impact the accurate settlement of VAT: a fixed amount ranging from €250 to €2,000
    
• For exempt, nontaxable, nonVAT, or reverse charge transactions: 5% of the undocumented or unrecorded amount, with a minimum penalty of €300
  
  • If the violation does not affect the determination of income: a fixed amount ranging from €250 to €2,000
    
• Formal violations that do not impact VAT or income: no penalty
  

For penalties incurred due to late submission or failure to issue an electronic invoice, you can use the voluntary correction (ravvedimento operoso). Penalties are based on how promptly errors or omissions are corrected.

Penalties for irregularities in the storage of electronic invoices

Penalties also apply to irregularities regarding the storage of electronic invoices. In this case, the penalty ranges from €1,000 to €8,000, similar to the penalties established for tax documents and accounting records.

As your business expands, managing the invoicing process can become increasingly complex. Some tools can assist in automating this process. Stripe Invoicing, for instance, is a comprehensive and scalable invoicing platform that allows you to create and send invoices for both one-time and recurring payments without needing to write any code. With Invoicing, you can save time and get faster payments, as 87% of Stripe invoices are paid within 24 hours. Thanks to collaboration with third-party partners, you can also use Invoicing for mandatory electronic invoicing.