Following several months of debate regarding data management methods (including the intervention of the Privacy Guarantor and promised extensions), electronic billing was introduced in Italy on 1st January 2019.
Despite numerous protests at the operational shortcomings of the online Exchange System, the Italian Revenue Agency published a statement on its website announcing that, in less than three days, a million and a half electronic invoices had been exchanged. Officially therefore, the introduction of the new procedure was a success.
What is electronic billing and what changes does it bring?
The new legislation stipulates that electronic invoices are now obligatory for all transactions involving the supply of goods and services by any individual resident, established or identified within Italian State territories. In other words, the new digital system enables the issue, transmission and storage of fiscal documentation.
The first change relates to the fact that, now the new digital system has been introduced, the traditional paper invoice, can, at least in part, be eliminated, with a consequent reduction in costs related to printing, mailing and storage. As far as the practical aspect of invoice preparation is concerned, nothing changes. Once the individual has filled out an invoice, instead of printing it or saving it as a PDF document, an XML file is generated in the format ‘FatturaPA’.
Another important change is exemption from keeping a VAT registry for those who working under the simplified accounting regime. The electronic invoice has also reduced the time window for fiscal auditing by 2 years for those individuals who only issue and receive invoices. Furthermore, with the advent of electronic billing, the option to view fiscal documents online immediately has become a reality for both professionals and end users.
What is the Recipient Code?
Among the main innovations of the electronic invoice is the introduction of the Recipient Code, an essential element when it comes to receiving and issuing fiscal documents. It is an alphanumerical code consisting of seven digits that the individual who issues the invoice must display on it. This code enables the Exchange System to identify who the fiscal document must be sent to.
The Recipient Code is one of three types of computerised address which can be supplied to anyone who issues invoices, in order to ensure correct delivery. The other two options are:
- PEC Address: in this case, the supplier is obliged to insert the value 0000000 in the ‘Recipient Code’ field, while the address provided by the client must be inserted in the field ‘PEC Recipient’.
- Alphanumeric code 0000000: this solution is to be used in instances where the client has not provided either a PEC address or a Recipient Code. In such cases, the person issuing the electronic invoice must inform the recipient of the document that it may be accessed via the restricted area of the Italian Revenue Agency website. It can be found in the section entitled ‘Invoices and Equivalents’.
The new electronic billing procedure is not obligatory for everyone. There are in fact several categories which are exempt, as follows:
- Professionals whose tax affairs are subject to the ‘advantageous’ tax regime;
- Autonomous workers working under the ‘forfeit’ tax regime;
- Small scale agricultural producers
The Italian Revenue has in any case specified that, professionals working under the advantageous or forfeit regimes may also issue electronic invoices. Those considering this should refer to regulation 89757, of April 30th 2018.
Translated by Joanne Beckwith