Regulatory updates - Italy

On 4 April 2023, the Revenue Agency under the Ministry of Economy and Finance published its Provision of Activation of the API Management platform and General Conditions of use of free access services in API Management in the Official Gazette.

What is the purpose of the new platform establishment?

Aiming to simplify the administration and promotion of digital services, this Provision considers creating a new API[1] Management platform to provide free services available from 15 May 2023. The Platform allows interoperability between the Agency’s service-providing system and the system user[2] with methods enabling the integration of the respective applications.

The free access service is aimed at users interested in integrating it into their own applications.

Which services are available in the API Management platform?

The services of verifying the existence and validity of the following are available through the API Management platform from 15 May 2023:

1. The Tax code aimed at verifying the existence and correspondence between the Tax code and the personal data available in the Tax Registry.
2. The VAT number aimed at verifying the validity of the assigned VAT number and providing information relating to:

• the activity status of the VAT number,
• the name of the subject or, in the absence of this,
• the surname and name of the owner's natural person.

The services are made available by the Agency for five years, starting from the access date.

[1] Application Programming Interface – set of definitions and protocols with which application software is created and integrated.

[2] Users are public and private subjects who adhere to the envisaged General Conditions of specific use for each type of service with the features available in a restricted area.

The Ministry of Economy and Finance started a public consultation on the VAT in the Digital Age initiative, which allows different taxpayers to give their contributions and opinions on the proposed documents for consultation.

The ViDA proposal was published on 8 December 2022 and was released in all EU languages, including Italian, on 10 February 2023.

The deadline for sending contributions to this public consultation is 10 April 2023.

The European Commission (EC) released a memorandum explaining Italy’s recent request for a derogation from Article 285 of the VAT Directive. Now that the request has been approved, all businesses with thresholds lower than EUR 85 000 are retroactively exempt from VAT obligations from 1 January 2023 until 31 December 2024.

Consequently, this measurement has an implication on related matters, such as exempting businesses from using SDI. According to previous data, this derogation will impact more than 63 000 enterprises, specifically the smaller ones.

Although the EUR 85 000 threshold has been the highest requested and approved in the EU, the incentives behind this proposal are aligned with the European Union’s objectives and consistent with existing policy provisions.

Previously, the EU expressed its commitment to supporting small businesses, which goes in harmony with the impact this measurement will have on small companies in Italy as it will relieve these businesses from costs that regard administration and compliance.

As Italy was the first country in Europe to have implemented countrywide B2B e-invoicing, the authorities have constantly monitored and improved its CTC models to fight tax evasion.

Starting 1 July 2022, the following taxpayer groups will be obliged to comply with the Italian e-invoicing mandate via the SDI platform:

• Taxpayers inside the flat-rate (regime forfettario)

• Amateur sports associations and third sector entities with revenue up to EUR 65 000

The entities to still be exempted from this mandate are microenterprises with yearly revenues or fees up to EUR 25 000, but they will be required to start issuing and clearing e-invoices as of 1 January 2024.

The new taxpayers in the scope of this mandate will be allowed to issue e-invoices within the following month when the transaction was carried out, without penalties being applied. The transition period will be applicable from 1 July 2022 until 30 September 2022. It will give the new taxpayers more time to conform to the general rule for electronic invoices to be issued within 12 days from the transaction date.

These developments were announced in the draft Decree-Law Decreto Legge PNRR 2 – Piano Nazionale di Ripresa e Resilienza (available in Italian).

As of July, business operators will have to report their cross-border transactions via Sistema di Interscambio (SDI).

To help you ensure compliance of your operations with the upcoming mandate, we provide an overview of steps to take in our latest blog.

Read the full article here.

As we reported in an earlier update, the Tax Work Decree in relevance with the 2022 Budget Law (DL 146/2021) has been already approved by the Senate but has been awaiting approval from the Chamber. Initially, it was estimated that the law will enter into force by the end of 2021.

On 30 December 2021, law no 234 was published in the Official Gazette and came into force on 1 January 2022. This means that Italy officially postponed the cross-border e-invoice reporting mandate for six months- from 1 January 2022 to 1 July 2022.

As we reported in an earlier update from last month, the European Commission released a proposal to the Council Implementing Decision to prolong the Italian B2B e-invoicing derogation deadline.

On 13 December 2021, the European Council approved the proposal authorizing Italy to maintain the mandatory electronic invoicing until 31 December 2024 by Council Decision no 2251 published in the European Official Gazette, n. L 454 of 17 December 2021.

The Tax Work Decree (It.: Decreto Fisco-Lavoro), linked to the 2022 Budget Law (DL 146/2021), was approved on 3 December 2021. It lists economic and fiscal measures required to take effect immediately to protect employment and other needs.

One of the major changes is the postponement of the Esterometro report abolishment in favour of transactional reporting of cross-border invoices via SDI, which was previously going to take effect on 1 January 2022.

The new timeline when Esterometro will be completely abolished is 1 July 2022.

The Decree has been passed to the Chamber, who will work on it starting 13 December 2021. Due to the urgent measures the Decree implies, it is expected to be passed into law on 20 December 2021.

However, businesses that are willing to opt-in for the new reporting schema now instead of continuing with Esterometro reports may do so.

On 5 November 2021, the EU Commission released a proposal to amend Implementing Decision for Italy to continue implementing mandatory electronic invoicing between businesses. The derogation previously granted to Italy expires on 31 December 2021, and the new deadline will prolong its effect for three years until December 2024.

The Italian government has imposed countrywide B2B e-invoicing mandates since July 2018. According to the estimations from Italy, electronic invoices have enhanced VAT compliance by ca. EUR 2 billion. In addition, between 2019-2020, the e-invoicing obligation has helped identify intra-community fraud for an amount of around EUR 1 billion.

The deadline extension would support the Italian tax administration’s efforts in combating tax evasion and businesses in increasing efficiency. The Decision is awaiting final approval from the EU Council, which is likely to happen, considering the positive outcome of e-invoicing in the country.

As part of the planned changes that have been delayed but are going to take place in 3 months from now, AGID intends to introduce a new set of mandatory metadata elements that must be stored along with the e-invoices. A suggested structure for maintaining the metadata is part of Appendix 5 in the new regulations (Section 2 with the XSD schema indicated in Section 2.1).

Furthermore, AGID has modified the metadata requirements. This includes adding new metadata elements and changing the description of some fields.

Together with the updates for e-archiving and metadata, there is an introduction of new standards and references such as the recently revised UNI 11386, with the purpose to ensure interoperability in the maintenance process.

The new guidelines and associated appendices can be found here.

Therefore, business operators in Italy now have to prepare for the new requirements for e-archiving and cross-border e-invoicing, which enter into force on the same date.