Mandatory E-Invoicing in Italy: What Businesses Need to Know

Italy is among the first European countries to have made electronic invoicing mandatory on a large scale. E-invoicing to the government was introduced in 2014 and 2015. Since January 1, 2019, mandatory electronic invoicing has also applied to domestic transactions between businesses and, when an invoice is issued, to many transactions with consumers.

The electronic invoice is sent as a structured XML file via the central Sistema di Interscambio (SdI). SdI is managed by the Italian tax authority, the Agenzia delle Entrate, and serves as the central link between the sender and the recipient.

Initially, exceptions still applied to certain small businesses. These exceptions have been phased out gradually. As of January 1, 2024, the e-invoicing requirement applies, in principle, to all businesses and professionals based in Italy that fall under the regulation, regardless of their revenue.

What changes as a result of the Italian requirement?

In Italy, e-invoicing is much more than simply sending an invoice electronically to a customer. A domestic invoice subject to the requirement is sent from the financial or invoicing system to SdI as a structured XML file.

SdI performs technical and formal checks on the file. If the invoice meets the requirements, it is forwarded to the recipient. If an invoice does not comply with the technical rules, SdI may reject it, and the sender will be notified.

A standard PDF invoice sent directly via email is therefore not a valid substitute for the electronic invoice via SdI for transactions covered by the mandate. A PDF may be used as a visual representation or supplementary copy, but the structured electronic invoice forms the basis.

What is Sistema di Interscambio?

Sistema di Interscambio, usually abbreviated as SdI, is Italy’s central exchange system for electronic invoices. The platform is managed by the Agenzia delle Entrate and plays a direct role in virtually every domestic electronic invoice flow.

The sender prepares the invoice in the prescribed XML format and sends it to SdI. The system checks, among other things, the technical structure and certain identification details, and then determines where the invoice should be delivered.

The recipient can register their own electronic receipt channel. Organizations often use a Codice Destinatario for this purpose, which tells SdI to which system or service provider the invoice should be sent. Other delivery methods supported by SdI can also be used.

Organizations can integrate directly with SdI or use a specialized e-invoicing provider that handles the connection, format conversion, transmission, receipt, and status processing.

The Italian XML Format: FatturaPA

Italian electronic invoices are exchanged in a prescribed XML structure. This national standard is generally referred to as FatturaPA, and its technical specifications distinguish between invoices sent to public organizations and those sent to private parties.

The XML contains the data needed to process the invoice automatically. This includes:

• supplier and customer information;
• VAT identification numbers;
• invoice number and invoice date;
• lines for goods and services;
• VAT rates and VAT amounts;
• totals and payment details;
• specific tax codes and document types.

The format also includes various codes that can be used to indicate the tax status of a transaction. This allows the same infrastructure to be used for regular invoices, credit memos, reverse-charge transactions, and various forms of cross-border reporting.

How are Italian e-invoices exchanged?

For a standard domestic B2B transaction, the invoice flow generally proceeds as follows:

1. The supplier creates the invoice in the ERP, accounting, or invoicing system.
2. The invoice data is converted to the required Italian XML format.
3. The electronic invoice is sent to SdI.
4. SdI performs technical checks.
5. The invoice is sent to the customer’s registered channel.
6. Status and error messages are sent back to the sender.
7. The invoice is digitally stored in accordance with Italian regulations.

For larger organizations, SdI is therefore usually integrated with the ERP landscape either directly or through an e-invoicing provider. Manual entry via government portals is technically possible but less suitable for large volumes of invoices.

E-invoicing to Consumers

Italy also uses the same electronic invoicing infrastructure for many transactions with consumers. When an invoice is issued for a B2C transaction and it falls under the e-invoicing requirement, the electronic invoice is transmitted to the tax authority via SdI.

A consumer does not normally have the same technical capabilities for receiving invoices as a business. Therefore, specific delivery rules apply, and a legible copy of the invoice may also be provided to the consumer.

Not every sale to a consumer results in an electronic invoice, however. For example, in the retail and hospitality sectors, there are also rules regarding electronic cash register recording and the reporting of daily sales. In addition, specific exceptions to the standard B2C e-invoicing rules apply to certain sectors and transactions.

International Transactions and Esterometro

The domestic e-invoicing mandate primarily applies to taxpayers established in Italy or having a relevant permanent establishment there. A foreign company that only has an Italian VAT number but is not established in Italy is therefore not automatically subject to the same domestic e-invoicing obligation.

However, international transactions are part of the Italian digital VAT reporting system. Since July 1, 2022, data on many transactions with suppliers and customers not established in Italy have also been submitted via the SdI.

This reporting is still often referred to as Esterometro. Whereas previously a separate periodic report on international transactions was submitted, since 2022 the same XML infrastructure used for electronic invoices has been employed.

In the case of an outgoing invoice to a foreign customer, this does not necessarily mean that the foreign customer receives the invoice via SdI. The Italian company reports the transaction via SdI and also sends the invoice to the foreign customer through the agreed-upon channel.

For incoming invoices from foreign suppliers, specific document types such as TD17, TD18, and TD19 can be used to electronically process and report, among other things, foreign services, intra-Community acquisitions of goods, and other reverse-charge transactions.

Invoicing the Italian Government

Italy began electronic invoicing to the public sector earlier than it did with B2B e-invoicing. Since June 2014, suppliers to central government agencies have been required to invoice electronically. As of March 31, 2015, this requirement was extended to the broader public sector.

These invoices are also processed through SdI. For government organizations, a specific identification code is used to route the electronic invoice to the correct public agency and department.

Italy also supports the European standard EN 16931 for electronic invoicing in public procurement. The Italian infrastructure can process European e-invoices and link them to the national FatturaPA structure.

What role does Peppol play in Italy?

Peppol does not play the same central role in Italy as it does, for example, in Belgium. For regular Italian B2B e-invoicing, SdI is the mandatory national infrastructure.

An Italian company may, however, use Peppol and other networks for international document exchange or specific processes. To comply with Italian domestic tax obligations, however, the connection to SdI remains essential.

This difference is relevant for international organizations. A Peppol Access Point alone is not automatically sufficient to handle Italian e-invoicing obligations. The solution must also support Italian XML specifications, tax rules, and communication with SdI.

E-invoicing and Real-Time VAT Reporting

Italy is a clear example of the shift from traditional VAT reporting to Continuous Transaction Controls (CTC). Because electronic invoices pass through the tax authority’s infrastructure, the Agenzia delle Entrate has access to detailed invoice data shortly after the transaction.

Consequently, for domestic transactions, no separate reporting of the same invoice data is required: the tax data is already received via SdI. For international transactions, additional data is also submitted via the same infrastructure.

E-invoicing and VAT reporting are therefore closely intertwined in the Italian model. This makes Italy fundamentally different from countries where electronic invoices are exchanged only directly between the supplier and the customer.

What does ViDA have to do with Italy?

The Italian system predates VAT in the Digital Age (ViDA) by quite some time. Italy did not wait for the European regulations but has already implemented its own national system for electronic invoicing and transactional VAT control.

Starting July 1, 2030, ViDA will introduce harmonized Digital Reporting Requirements for relevant cross-border B2B transactions within the European Union. This reporting will be based on structured electronic invoices.

For Italy, further European harmonization is of particular importance. Existing national systems for real-time transaction reporting do not need to be phased out immediately, but must ultimately align with the European model and the associated standards.

Since Italy already had such a national real-time reporting system in place before 2024, a longer transition period applies. By January 1, 2035, at the latest, the Italian system for domestic e-invoicing and digital reporting must be brought into line with the European ViDA framework.

The Italian Roadmap for E-Invoicing

The key steps are:

• June 6, 2014: Mandatory e-invoicing is introduced for suppliers to central Italian government organizations.
• March 31, 2015: The B2G requirement is extended to other public organizations.
• January 1, 2019: Mandatory electronic invoicing via SdI is introduced for domestic B2B transactions and for many B2C invoices.
• July 1, 2022: Data on cross-border transactions will be submitted via SdI and the electronic invoice format; the traditional Esterometro model will thus be replaced by transactional reporting.
• January 1, 2024: The remaining revenue-based exemption for small businesses expires, and the e-invoicing requirement is further expanded.
• April 14, 2025: ViDA takes effect, giving EU member states more flexibility—under certain conditions—to introduce mandatory domestic e-invoicing.
• December 31, 2027: The current specific European authorization for Italy’s mandatory e-invoicing regime expires.
• July 1, 2030: ViDA introduces harmonized electronic invoicing and Digital Reporting Requirements for relevant cross-border B2B transactions.
• January 1, 2035: Deadline for bringing existing national real-time transaction reporting systems, including the Italian model, into alignment with the European framework.

What does this mean for organizations?

For organizations with an Italian entity, e-invoicing is not a future requirement: it has been part of daily financial operations for years. Invoices must be created in the correct structured format, validated, sent or received via SdI, and processed and stored in accordance with Italian regulations.

International organizations must also be able to distinguish between domestic invoices, international sales, foreign purchase invoices, B2G transactions, and specific tax scenarios such as reverse charge. Each of these different transactions may require different document types and processing rules.

Italy thus clearly illustrates how diverse national e-invoicing models are across Europe. Belgium uses Peppol as its central infrastructure; Germany operates largely in a decentralized manner; France uses accredited platforms; Poland uses KSeF; and Italy uses the central SdI. An international e-invoicing solution must be able to support these different formats, channels, and tax models from a single financial architecture.