Italy was the first European Union country to mandate generalized B2B e-invoicing via clearance, and after more than seven years of live operation, its Sistema di Interscambio (SDI) can be a benchmark system for other countries. All invoices flow through this single government-operated clearance hub in FatturaPA XML format, according to the European Commission.
The most recent change worth acting on is FatturaPA v1.10, which was released in April 2025. With version 1.10, the Agenzia delle Entrate introduced the TD29 document type for missing or irregular invoices and updated the RF20 code for EU value-added tax (VAT) exemptions. These updates affect enterprise resource planning (ERP) schema configurations and how accounts payable (AP) teams handle supplier non-compliance. If your system hasn’t been updated to v1.10, that’s the immediate action item.
Italy also holds an EU derogation through December 31, 2027, allowing its national mandate to continue under domestic rules while the EU’s ViDA (VAT in the Digital Age) framework takes shape. For finance teams already running compliant SDI workflows, that’s a structural head start on the broader European transition.
Key highlights:
- Italy’s B2B e-invoicing mandate has been fully operational since January 2019, covering all VAT-registered businesses through the centralised SDI platform.
- B2B, B2G and most B2C invoices pass through SDI in FatturaPA XML format before it’s legally valid.
- FatturaPA v1.10 (April 2025) introduced the TD29 document type for irregular invoices and the updated RF20 code for EU VAT exemptions.
- Italy’s mandate is operating ahead of the EU’s ViDA framework, with an EU derogation extended through December 2027.
What e-invoicing in Italy means
Italy runs a clearance model for its e-invoicing system, which means every invoice is submitted to the government-operated SDI, validated against the FatturaPA schema and only then delivered to the recipient.
This makes Italy structurally different from France’s platform-based approach (where businesses choose from approved intermediaries) or the UK’s expected decentralised exchange model. In Italy, there’s one hub and everything flows through it.
How the SDI clearance process works
The lifecycle starts when the issuer generates a FatturaPA XML invoice in its ERP or billing system and submits it to SDI via web service, certified email or intermediary channel. SDI then validates the invoice against the FatturaPA schema, which involves checking tax IDs, schema compliance and duplicates. Then, it assigns the invoice a unique receipt identifier.
If validation fails, SDI returns a ricevuta di scarto (rejection notification) with error codes, and the issuer corrects and resubmits using the same invoice number and date.
If validation passes, SDI routes the invoice to the recipient’s registered Codice Destinatario or PEC address and issues a ricevuta di consegna (delivery receipt).
What qualifies as an e-invoice in Italy
For an invoice to be legally valid in Italy, it needs to be structured, machine-readable and conform to FatturaPA’s logical structure. That means:
- Structured XML in FatturaPA format, whose data content is aligned with the European standard EN 16931 via the Italian CIUS, even though the XML syntax is specific to Italy
- Supplier and customer tax IDs (Partita IVA/Codice Fiscale) included as required fields
- Line items, VAT rates, payment terms and the recipient’s Codice Destinatario or Posta Elettronica Certificata (PEC) address populated correctly
Italy e-invoicing timeline at a glance
Italy’s e-invoicing mandate has been building since 2014, with each phase expanding scope and tightening requirements, according to the European Commission.
Which businesses and transactions are in scope
Italy’s mandate is broad compared to other EU countries. Simply put, if you have an Italian VAT registration, you’re almost certainly in scope.
Who needs to comply
All businesses and self-employed professionals with Italian VAT registration are required to issue and receive e-invoices through SDI. This includes foreign companies with Italian VAT numbers.
Limited exemptions remain, but these exemptions have been narrowed significantly over the past three years.
Domestic B2B and B2G transactions
All domestic invoices between VAT-registered businesses flow through SDI. This includes:
- Standard invoices (TD01)
- Credit notes (TD04)
- Debit notes (TD05)
- Self-billing invoices where the buyer invoices on behalf of the supplier
B2G invoicing has followed the same pathway since January 2015, with public administration recipients identified by published Codice Destinatario codes.
Cross-border and international invoices
Since July 2022, cross-border transactions are reported through SDI using specific document types that replaced the old esterometro reporting obligation. These are issued by the Italian recipient – not the foreign supplier – and each carries different VAT treatment. Here’s a short description of the treatments, according to Agenzia delle Entrate:
- TD17: Services received from foreign suppliers (self-billing)
- TD18: Intra-EU goods purchases (integration invoice)
- TD19: Goods already in Italy purchased from a foreign supplier (not imports or intra-EU acquisitions)
Finance teams with international supply chains need to map these document types correctly, because getting the classification wrong means incorrect VAT treatment and potential reporting gaps that surface during audits.
How FatturaPA works: Format, fields and the v1.10 update
FatturaPA is the XML schema that every Italian e-invoice conforms to, aligned with the European standard EN 16931. Understanding its structure and staying current with version updates is a practical compliance requirement, not a technical nice-to-have.
April 2025 FatturaPA update
The April 2025 update to FatturaPA introduced three changes finance teams should be aware of:
- TD29 is a new document type for reporting missing or irregular invoices to the Agenzia delle Entrate. When a supplier fails to issue a valid invoice within the required timeframe, the buyer must submit a TD29 notification through SDI within 90 days to avoid the penalty. Note that TD29 is a compliance notification only — it carries no VAT relevance and cannot be used to claim VAT deduction. Regularisation and VAT recovery still require TD20.
- RF20 is a new tax regime code covering the cross-border VAT exemption scheme under EU Directive 2020/285.
- The €400 threshold for simplified invoices has been removed for businesses operating under the flat-rate regime or the cross-border VAT exemption scheme. If your workflows used simplified invoices based on that threshold, verify whether they still apply.
If your ERP schema predates the April 2025 update, invoices using TD29 or RF20 may fail validation or be classified incorrectly. Confirm your schema version with your ERP vendor or IT team.
Codice Destinatario and PEC addresses
Every B2B recipient in Italy needs either a seven-character Codice Destinatario (registered SDI) or a certified PEC email address for SDI to deliver the invoice.
Using the wrong code can cause SDI delivery failures. When that happens, SDI issues a ricevuta di impossibilità di consegna. The recipient has to retrieve the invoice manually from the Agenzia delle Entrate portal, and your payment timeline slips.
Keeping recipient codes current and verified is one of the highest-impact data quality activities for Italian invoicing.
The invoicing lifecycle from submission to archive
Beyond the clearance process itself, SDI generates specific notifications at each stage that your finance team needs to monitor and act on.
Invoice timing requirements
Timing rules vary by invoice type:
- Immediate invoices need to be transmitted to SDI within 12 days of the taxable transaction date.
- Deferred invoices (fatture differite) can be issued by the 15th of the month following the transaction, but only for specific scenarios involving physical delivery of goods with accompanying documents.
Archiving obligations
SDI holds a copy of every invoice, but that doesn’t satisfy your archiving obligation. Businesses are required to maintain their own electronic archive that:
- Preserves the integrity and authenticity of the original XML
- Is searchable for tax authority inspection
- Covers a 10-year retention period
- Meets the technical requirements of the Codice dell’Amministrazione Digitale
Italy e-invoicing compliance readiness checklist
Use this to track where your Italian e-invoicing operations stand today.
Schema and technical:
- Confirm ERP or billing system is running FatturaPA v1.10 schema — verify directly with your vendor or IT team
- Verify TD29 document type is configured and available for missing or irregular invoice scenarios
- Verify RF20 code is updated in VAT classification settings to reflect current EU exemption rules
- Confirm simplified invoice workflow has been updated to reflect the removal of the €400 threshold
Master data:
- Codice Destinatario verified and current for all Italian customers – build annual verification into your data management cycle
- PEC addresses recorded and tested where applicable
- Partita IVA numbers validated for all Italian suppliers and customers against Agenzia delle Entrate records
Cross-border invoicing:
- AP workflows use correct document types (TD17, TD18, TD19) for foreign supplier transactions, with classification logic documented
- Submission timing tracked and monitored for all cross-border SDI obligations
Archiving:
- Electronic archiving meets conservazione sostitutiva requirements under the Codice dell’Amministrazione Digitale
- 10-year retention confirmed and tested for all SDI invoices
- Archive is searchable and accessible for tax authority inspection
Ongoing monitoring:
- Process in place to track Agenzia delle Entrate technical updates and FatturaPA version changes
- ERP vendor confirmed on their update roadmap for future FatturaPA releases
- ViDA transition planning included in broader EU compliance monitoring
Italy’s e-invoicing requirements continue to evolve, both through Agenzia delle Entrate updates and the broader ViDA transition on the horizon. Build a regular review cycle into your compliance operations so regulatory changes are caught early rather than discovered during an audit.
