Will Italy be the first with mandatory B2B e-invoicing in the EU?

Italy has a VAT gap of EUR 35 billion, the largest among the EU Member States according to a 2015 study, has been implementing multiple measures aimed at both preventing tax evasion and increasing VAT collection. One such mechanism is the introduction of electronic invoicing in Italy:

  • Since June 2014, e-invoicing has been mandatory for suppliers to governmental entities.
  • Since January 2017, e-invoicing using the Italian governmental e-invoicing platform Sistema di Interscambio (SDI) has been optional for B2B transactions.

To encourage voluntary use of the SDI platform, the Italian government has offered multiple tax benefits to businesses that use it, including the exemption from Intrastat reporting and priority for VAT repayments.

Italy has also long nurtured the idea of making e-invoicing mandatory among private businesses. The initial plan was to make B2B e-invoicing mandatory beginning in January 2018. However, in the latest budget proposal the deadline was pushed back:

  • Beginning in July 2018, B2B e-invoicing will become mandatory for companies engaged in petrol sales and for sub-contractors to suppliers in public procurement.
  • Beginning in January 2019, B2B e-invoicing will become mandatory for all companies: all business to business transactions for the supply of goods and taxable services would have to be submitted through the Sistema di Interscambio.


The Italian government is ultimately aiming to achieve what in other parts of the worlds (e.g. Latin America or Turkey) is known as the clearance model. According to the clearance model, all transactions (primarily e-invoices) between private businesses must pass through a government e-invoicing platform or hub so that the tax authority can, in real-time or close to real-time speeds, effectively audit and monitor dealings between trading partners. Implementation of the clearance model has reportedly helped many governments to decrease VAT gaps and improve efficiency.

So far so good. But where’s the catch?


Italy is not one of the EU’s leading digital economies. According to the same study, only Romania has a lower internet use index. In Italy, approximately four out of five million (80%) registered businesses are SMEs.

This means that broad exceptions must be adopted. Alternatively, a far more careful and gradually rolled-out schedule will be required with the government providing the necessary tools.


If Italy mandates B2B e-invoicing but no changes are made to EU-level regulations, or if no exception is granted by the EU Commission, then multiple provisions of the VAT Directive will be breached:

  • Buyer’s consent.
    In order to protect small businesses from an unexpected and disproportionate cost and administrative burden, the VAT Directive stipulates that the supplier must obtain the buyer’s consent to switch to electronic invoicing. Mandatory e-invoicing would not only be in breach of this requirement, but given the state of digitisation and internet usage in Italy, it would also create a disproportionate technical and cost burden primarily for small businesses. Will the Italian government take this into account?
  • Freedom to choose a document format.
    The VAT Directive provides for freedom of choice in respect of the format in which trading partners exchange electronic invoices. If the same approach is chosen as currently applies to B2G e-invoicing, all invoices will have to be issued exclusively in the structured format FatturaPA, and cannot be issued in PDF format. Most businesses would face a major challenge with issuing and processing such e-invoices, as their ERP systems might lack support for this format or, as is often the case, work in different formats. A solution to this problem could be to allow the issuance, acceptance and processing of e-invoices in any or several formats. This would, however, require intensive development of the SDI platform. Does the Italian government have the time and budget for this?
  • Freedom to choose an I&A method.
    The VAT Directive provides for freedom of choice in selecting an integrity and authenticity (I&A) method: business controls, EID or e-signature. However, under the Italian procurement legislation, only e-signature is recognised as a valid I&A method. Will the government allow other I&A methods or force the private sector into using e-signature and in this way, reinstate the trade barriers the EU is trying to combat?

Many questions are unresolved. This does not mean, however, that the plans will not be enforced. As we have seen in Portugal, Spain, and Turkey, for instance, the government may prefer to deploy something and fix it “on the fly”.

Pagero is keeping an eye on Italian developments and is ready to support businesses of any size. Their platform Pagero Online already provides connectivity with the SDI platform to ensure compliance with Italian requirements.


Pagero’s cloud-based platform Pagero Online is a cloud-based compliance-as-a-service platform. One single integration with Pagero Online allows the user to achieve technical and tax compliance worldwide.

Pagero Online offers many-to-many connectivity, meaning that you avoid the hassle of point-to-point integration. Our platform provides direct connectivity with government e-invoicing platforms in several countries, including Austria, France, Italy, Norway, Spain, the Netherlands and Turkey.



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