Italy was the first EU country to roll out a full-scale e-invoicing mandate. Since 2019, the Sistema di Interscambio (SDI) has required B2B, B2C, and B2G invoices to pass through the government’s exchange platform in a structured XML format known as FatturaPA.
Unlike most EU member states that are still preparing for VAT in the Digital Age (ViDA), Italy has already been operating in a near real-time reporting environment for several years. This gives businesses an early view of what the EU’s future VAT compliance model could look like.
A timeline of change
- 2014–2015: E-invoicing becomes mandatory for suppliers to public administrations.
- 2019: The B2B and B2C mandate begins, covering all resident taxpayers.
- 2022: Cross-border reporting is integrated into SDI, replacing the “esterometro” with new TD codes (TD17–TD19, TD28).
- 2024: Micro-entities and “forfettari” are brought into scope, eliminating size-based exemptions.
- 2025: New technical specifications (FatturaPA v1.9) take effect, including the introduction of TD29 for irregular supplier invoices and the new RF20 regime code.
- 2027: Italy’s EU derogation is set to expire in December, unless ViDA establishes a harmonised EU-wide approach before then.
Each milestone shows a steady progression from mandatory adoption to preventive controls. With TD29, Italy is shifting responsibility not only to the issuer but also to the buyer, a move that previews the EU’s broader compliance vision.
Who must comply?
- All Italian VAT-registered businesses (B2B, B2C, B2G) must issue invoices through SDI.
- Public administration suppliers must include a CUU/IPA code.
- Consumers (B2C) receive invoices with the generic code “0000000.”
- Non-resident VAT-only registrants are not required to use SDI for B2B/B2C invoices but must still report cross-border flows.
- Healthcare providers are excluded; invoices are reported instead to the Tessera Sanitaria (STS) system.
The distinction between established and non-established entities is particularly relevant for multinationals. Many mistakenly assume that VAT registration alone triggers SDI obligations, in reality, Italy draws the line at establishment.
Deadlines and technical rules
Italy applies some of the strictest invoicing deadlines in Europe:
- Invoices must be transmitted within 12 days of the transaction date.
- Deferred invoices must be issued by the 15th of the following month.
- If SDI rejects an invoice (“scarto”), it is treated as not issued and must be corrected and resent within 5 days.
From a technical standpoint, invoices must be submitted in FatturaPA XML. File size limits apply: 5 MB per XML file; if using PEC, multiple files can be sent in one message up to 30 MB.
These rules effectively place Italy in a real-time VAT environment. Businesses cannot afford to wait for month-end reconciliations; they need automated monitoring and correction workflows to avoid penalties and disrupted cash flow.
Archiving and retention
Invoices processed through SDI must be stored electronically for 10 years (“conservazione sostitutiva”). Both issuers and recipients are responsible for compliant archiving, which must guarantee integrity, readability, and accessibility throughout the retention period.
Archiving in Italy isn’t just a back-office requirement. With digital invoices forming the backbone of the tax system, how a business preserves its invoice history is central to audit defence and long-term compliance.
Italy as a blueprint for ViDA
Italy is not only ahead of the EU, it is shaping the conversation. The SDI system demonstrates how real-time invoice clearance can improve VAT collection, but also how it reshapes supply-chain responsibilities.
The EU’s ViDA proposal mirrors many of Italy’s features: structured invoice formats, centralised clearance, and the progressive removal of exemptions. For companies, this means that investing in robust SDI processes now provides a head start on adapting to ViDA across Europe.
How GVC supports your business
At Global VAT Compliance (GVC), we help multinational businesses treat Italy’s system not as an isolated compliance challenge but as part of a strategic EU-wide tax approach. Our services include:
- Mapping invoices to FatturaPA v1.9, including TD29 and RF20 updates.
- Setting up automated workflows for scarto detection and correction.
- Supporting cross-border reporting (TD17–TD19, TD28) and San Marino flows.
- Providing conservazione services to meet Italy’s 10-year archiving requirements.
- Aligning your Italian processes with ViDA-readiness across Europe.
