In this article, I am going to explain what mandatory B2B electronic invoicing is and how it works, presented as one of the cornerstones in fighting tax evasion provided for by the 2018 Budget Law, regarding B2B trade exchanges (Business to Business), i.e. between private companies and professionals. A process that CARAVATI PAGANI – Dottori Commercialisti Associati, considers positively regarding the implications of accounting processes automation and computer-based business cycles.
WHAT IS THE MANDATORY ELECTRONIC INVOICING B2B?
It is a B2B invoice that is issued, signed and stored digitally, rather than in paper format. The electronic invoice is issued or received in any electronic format that is capable of ensuring the authenticity of the origin, the integrity of the content and its readability by adding the electronic signature of the person issuing the document, according to the Presidential Decree 633/1972, art. 21, paragraph 3.
Since June 2014, electronic invoices are mandatory for all taxpayers who have professional and commercial relations with the Public Administration (FEPA). In this regard, in order to facilitate mandatory electronic invoicing, the Revenue Agency and SOGEI have made available the free platform of SDI – Interchange System, which can be used both with regard to PA and between companies and freelancers (for “private” B2B as the lawmaker calls them, that is, non-PA) to forward and receive invoices in electronic XML format, according to established standard templates (currently PA 1.2. Invoice format).
WHY IS THE MANDATORY ELECTRONIC INVOICING NECESSARY?
There are numerous reasons (and the urge) to manage invoices in electronic format for B2B business relations:
- Tax and accounting simplification;
- Getting more tax data informations to make annual tax returns, withholding tax certifications, 770 forms and other documentation, more easily by means of pre-compiled data and therefore already certified by the Revenue Agency.
- The electronic invoice will make impossible the issuing of false invoices, non-registration by the involved parties and fraudulent registrations (invoices that indicate lower amounts than the actual transaction);
MANDATORY ELECTRONIC INVOICING: WHAT ARE THE ADVANTAGES FOR THE TAXPAYER?
With the new Budget Law 2018, the electronic invoice B2B will probably become mandatory and the taxpayer can get substantial tax advantages:
- Exemption from communication of their VAT transactions 2017 (in Italian the so-called “spesometro”);
- Exemption from the obligation to keep VAT registers (sales and purchases);
- Exemption from the Intrastat list;
- Exemption from data communication related to leasing company contracts;
- Priority VAT refund within 3 months from the tax return sending;
- Two years reduction of the assessment period;
- Automation of the processes for the management of incoming and outgoing accounting documents (the “entry data” phase and the subsequent errors are avoided), which will lead to a reduction in time and costs of accounting processes. The studies of the Polytechnic Observatory in Milan estimate savings of about 4 € per issued invoice and 8 € per received invoice.
- The possibility of using the pre-filled VAT return and F24 forms provided by the Revenue Agency.
HOW DOES THE MANDATORY ELECTRONIC INVOICING WORK BETWEEN PRIVATE BUSINESSES (B2B)?
The electronic invoice assumes the use of a digital platform or software for the issuing, receiving, signing, transmission and storing of the invoice.
What do the companies and professionals need to do in order to create electronic B2B invoices?
Generate the electronic invoice by means of a proper software and with free tools provided by SDI;
Having access to the Interchange System of the Revenue Agency and choose the account;
Load the external file or select the invoice;
Sign the invoice by means of a digital signature or seal;
Send the invoice by means of the Interchange System;
Wait for confirmation of file receipt;
Manage possible exceptions or anomalies.
THE FUTURE OF MANDATORY ELECTRONIC INVOICING B2B
The electronic invoice obligation between private businesses (B2B) will not be a simple path. Most likely it will face tough opposition, also due to technical complications, particularly the ones towards individual entities (B2C), although at this point it seems to be an inevitable and highly supported process by the European Union.
There are two main reasons:
- The will to fight tax evasion;
- The increasingly urgent need for a simplified and flexible tax regime.
- Improve the efficiency of business processes managed for over 40 years in the same way.
Two reasons that express not only an Italian and European need, but above all tied to the market that needs greater interoperability (including fiscal and administrative) in international operations. Mandatory electronic invoicing B2B therefore has to be accepted positively and at the beginning it could only be managed towards Italian subjects with VAT registration number, however requiring a “double track” for foreign customers/suppliers (and consequently an obligatory “across-the-border” communication of their VAT transactions – on a monthly basis in the future – at least for such data).
The draft version of the financial law provides for electronic invoices to become effective as of July 1st 2018 between private individuals for gas and diesel deliveries and for services rendered by subcontractors towards major contractors in contracts with PA, while on January 1st 2019 the obligation should be extended to all companies and professionals. Supposedly only the flat-rate and lowest bracket taxpayers will be excluded.
