At the end of 2020 a new budget law for 2021 was passed by authorities in Italy. The law proposed changes to Italian tax reporting, including the discontinuation of Esterometro as a required method of reporting. Instead, from January 2022 all transactions – including those with foreign partners – must be sent to Sistema di Interscambio (SdI).
The current situation
What is an Esterometro?
An Esterometro is a quarterly report submitted by Italian VAT registered businesses to the Agenzia delle Entrate (Italian Revenue Agency) that details all cross-border business transactions. Submission of such reports was made mandatory from the start of 2019.
Why was Esterometro introduced?
The Esterometro scheme was introduced to support the Italian Sistema di Interscambio (SdI), as SdI reporting was limited to transactions involving Italian VAT registered businesses. This is now no longer the case.
How are Esterometro reports filed?
Esterometro reports are submitted in XML format and include the taxpayer’s digital signature. Thereby, the same XML format as for regular FatturaPA invoices is being used. As with FatturaPA B2B and B2G invoices, the invoices can be sent manually via the Fatture e Corrispettivi web portal, or by using a dedicated service provider such as ecosio. In the latter case invoices are automatically sent from the company’s ERP system to the SdI, without the need for any manual human intervention.
What are the current fines for non-compliance re. Esterometro declarations?
Each missed invoice carries a €2 penalty, up to a maximum of €1,000.
The upcoming changes
When can I start submitting cross-border transactions to Sistema di Interscambio (SdI)?
Businesses can already report cross-border payments through SDI thanks to a recent update (SdI version 1.6.1). This will become mandatory in January 2022.
How do I report cross-border transactions via Sistema di Interscambio (SdI)?
The process for reporting cross-border transactions will be the same as reporting transactions with other Italian VAT registered businesses.
For more information on sending invoices with FatturaPA via SdI, see our blog post here.
What is the penalty for non-compliance under the new rules?
As with Esterometro reporting, each missed invoice will carry a €2 penalty, this time up to a maximum of €400 per month.
Are non-residents required to do anything?
No. If you are not an Italian taxpayer the rules do not apply to you. The rules do apply to you, however, if you are a provider or supplier who is registered in Italy or a domestic Italian company with a VAT-ID.
Will there be more changes in future?
Yes! While it may not be possible to say what these changes might be, it is certain that e-invoicing rules and regulations will change over time. This is just as true elsewhere in Europe too. As more and more countries move towards a continuous transaction control (CTC) model, further changes to national e-invoicing regulations are inevitable.
How can I stay compliant?
Given the number of new e-invoicing regulations and the speed at which they are being introduced by countries, keeping track of what your business needs to do and adapting internal processes accordingly can be difficult. The most sensible option to ensure ongoing compliance and successful B2B message exchange is to enlist the help of an experienced e-invoicing solution provider such as ecosio.
How ecosio can help
At ecosio we make e-invoicing via Sistema di Interscambio easy. As part of our fully managed solution we offer deep integration in your ERP system (e.g. SAP ERP or SAP S/4HANA). All you need to do is export received and booked accounts payable invoices to us (via your existing ERP user interface); we then take care of submitting them in the right format etc. to SdI.
This upcoming change to the Italian system is just one example of how legal developments can impact daily B2B processes. As we understand the importance of streamlined e-invoicing and the frustrations and risks of constantly having to adapt internal processes, at ecosio we safeguard your automated message exchange by taking care of all EDI and e-invoicing tasks. In short, we handle everything so you don’t have to.
To find out more about our fully managed solution and how you can futureproof your e-invoicing processes, get in touch today!