Italian lawmakers created a legislative decree and are employing incentives rather than penalties to encourage more taxpayers to adopt electronic invoicing.
Following in the footsteps of Portugal, Italy has taken the incentive approach to increasing the use of B2B e-invoicing to simplify administration and accounting, and reduce the reliance on paper documents.
Italy's legislative decree no. 127 gazetted on 18 August 2015 came into force on 2 September. A raft of measures will now be implemented to encourage the use of e-invoicing, including a free, Revenue Agency-provided system for the creation and use of e-invoices by VAT-registered businesses. This system is to be rolled out by 1 July 2016.
From a tax obligation perspective, Italy is making the adoption of e-invoicing enticing by offering the following incentives:
- Exemption from submitting the 'Spesometro' communication, Intrastat communication with regard to intra-community purchases of goods and services and the communication of purchases from suppliers established in San Marino Republic.
- Priority status for e-invoicing taxpayers with regard to VAT refunds – annual return claims to be dealt with within three months of submission.
- One year reduction in the usual four-year tax audit procedure period, in cases where a taxpayer can guarantee payments are able to be traced.
- Simplifications in some taxable person categories with regard to VAT compliance, and the complete exemption from input and output VAT bookkeeping and conformity check.
Exemptions from submitting additional forms and returns (like Intrastat and Black List* for entities that will be using the e-invoicing system) should be taken with a grain of salt. The e-invoicing system is aimed at increasing visibility of transactions to Italian tax authorities and over time, decreasing the number of transactions that are currently 'invisible' for the tax office.
A transparency hike in day-to-day transactions is something that needs to be reached - not only in Italy but across the EU - to stop the VAT system from leaking.
*The Black List declaration was established in Italy in 2010. It is a return that has to be filed by entities registered for VAT purposes in Italy who performed business transactions for total amount exceeding EUR 50,000 in a reporting period with entities registered or seated in countries which are put on Black List. Those countries are listed in a decree and are labelled as "high risk countries", from a tax point of view.
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