2014: Mandatory B2G e-invoicing in Italy and FatturaPA
What is FatturaPA?
In 2014, the Italian government introduced mandatory business-to-government (B2G) e-invoicing for suppliers to public administration and government offices. FatturaPA is the name of the electronic invoice in Italy for public administration. It is the only type of invoice that is accepted by government bodies. Authorities only accept e-invoices through the Sistema di Interscambio (SDI), which is the official exchange system.
According to the government, the main purpose of these measures is to reduce VAT fraud, optimize internal accounting processes of businesses, and make communication between the government and taxpayers easier.
The format of FatturaPA
The SDI only accepts the standardized FatturaPA format, which is set by the Italian Revenue Agency (Agenzia delle Entrate). Taxpayers provide the mandatory and voluntary information required by the structured invoice in a digital XML format.
For B2G invoices, a qualified electronic signature may be applied depending on the applicable public administration requirements. For B2B transactions, a digital signature is generally not mandatory, as authenticity and integrity are guaranteed through the SdI transmission process.
The transmission relies on the unique identification code of the office to which the invoice is addressed, and which can be found in the Index of Public Administrations.
2019: Mandatory e-invoice in Italy for all business-to-business (B2B) and business-to-consumer (B2C) transactions
From 1 January 2019, all invoices issued following the sale of goods or provision of services carried out between entities resident or established in Italy must be electronic invoices. The electronic invoice requirement in Italy, introduced by the 2018 Budget Law, applies to both B2B and B2C operations.
To create an electronic invoice, taxpayers must use software capable of generating invoices in the XML format required by the Italian Revenue Agency. Electronic invoices must always be transmitted through the SdI. Otherwise, they are considered not issued. If invoices are issued in a different way, penalties may apply according to the Italian tax legislation.
How does FatturaPA work?
Electronic invoices are automatically generated in the supplier’s ERP system before being transmitted to the SdI through official web services or APIs.
The SdI performs technical and business validations and returns electronic notifications indicating whether the invoice has been accepted or rejected.
Once accepted, the SdI delivers the invoice to the recipient and returns the corresponding delivery and status notifications to the issuer.
SAP e-invoice solution for Italy
After output type, tax code-based customizations are completed, as a first step once the invoice is triggered by the invoice printing programs, SNI solution retrieves the information on the pre-printed version of the invoice, converts this data into the required XML file and drops it to SNI e-Invoice Cockpit.
Key users are able to monitor and track the created invoices through the cockpit, which is a simple, user-friendly interface. After generating the e-invoices, end users can monitor the XML and HTML versions of the invoices, envelope them, send them to the SdI, and track their progress from a single screen. In case of a rejection, key users will be able to see the reason for the rejection and formulate their own solutions accordingly.
SNI’s solution provides complete support for both outbound and inbound invoices. Outbound invoices are transmitted to the tax authorities through official APIs or web services. Similarly, for inbound invoices (issued by suppliers to our clients), our solution automatically retrieves data at regular intervals using the appropriate APIs or web services provided by the tax authorities.
All inbound invoices are displayed on SNI’s Inbound Cockpit, a dedicated interface designed to enhance the user experience and allow efficient management. Each invoice is available in both XML and (human-readable) HTML/PDF formats, ensuring detailed insight and compliance with regulatory requirements.
SNI’s invoice reconciliation feature offers seamless validation of incoming invoices by automatically matching them with purchase orders, delivery notes, or other internal records. This feature simplifies the validation of incoming invoices, reduces manual effort, and minimizes errors thus offering a quick resolution. With enhanced accuracy and efficiency, businesses can gain better control over their financial workflows and ensure smooth operations.
The solution integrates seamlessly with SAP ECC 4.7 and higher, SAP ERP, SAP S/4HANA, and SAP Business Technology Platform (SAP BTP), while also providing ERP-independent integration capabilities for non-SAP environments.
New update for electronic invoicing in Italy
In early 2020, the Italian tax authorities introduced the updated FatturaPA technical specifications.
The new XML versions 1.6.1 (B2B) and 1.3.1 (B2G) became mandatory from 1 January 2021.
From 1 July 2022, cross-border transactions must also be reported through the SdI using the FatturaPA XML format, replacing the Esterometro reporting obligation.
The Italian Revenue Agency continues to publish periodic updates to the FatturaPA technical specifications, and taxpayers are required to comply with the latest XML schemas and validation rules.
Is it mandatory to sign invoices electronically?
The invoice issuance process directed to public administrations (B2G) may require a qualified electronic signature depending on the applicable public administration requirements. The digital signature is generally not mandatory for B2B transactions.
Is it necessary to demonstrate the integrity and authenticity of the invoices?
Yes. The electronic invoice is a digital document whose authenticity, integrity, and traceability are ensured through the SdI exchange process and compliance with the Italian electronic invoicing regulations.
Is there a specific requirement to archive electronic invoices?
Electronic invoices must be stored in a manner that guarantees their integrity, authenticity, readability, and accessibility throughout the mandatory retention period. Italian tax legislation generally requires electronic invoices to be retained for 10 years. Electronic archiving must comply with the Italian electronic preservation (conservazione elettronica) requirements.