Italy’s e-invoicing through the SdI: how Europe’s first B2B clearance model works in practice

From public sector invoicing to a general mandate

Italy began with electronic invoicing to public administrations, which became mandatory for central government bodies in 2014 and for all public administrations in 2015. The 2018 budget law extended the obligation to most invoices between parties established or identified for VAT in Italy from 1 January 2019, covering both business-to-business and business-to-consumer invoices.

Some groups were initially exempt, including businesses under the flat-rate tax regime. That exemption was phased out: flat-rate taxpayers above a revenue threshold were brought in from July 2022, and from 1 January 2024 the obligation extended to flat-rate taxpayers generally.

Italy is often described as a clearance model because invoices pass through a government platform before they reach the customer. The tax authority therefore sees invoice data in near real time, which it uses for pre-filled VAT returns and risk analysis.

How the Sistema di Interscambio works

The Sistema di Interscambio, known as SdI, is operated for the Agenzia delle Entrate. The supplier, or a service provider acting for it, sends the invoice to SdI in the FatturaPA XML format. SdI checks the file and, if it passes, delivers it to the recipient and sends receipts back to the sender.

An invoice that is not transmitted through SdI is not considered issued for tax purposes. A PDF sent by email may be a useful courtesy copy, but it is not the legal invoice.

FatturaPA XML

The structured format required for invoices, including standard fields for parties, lines, VAT and payment.

Recipient code

A seven-character codice destinatario identifying the channel through which a business receives invoices.

PEC address

Certified email can be used as an alternative delivery channel for recipients without a recipient code.

Receipts

SdI returns delivery or rejection receipts, which systems should store with the invoice.

Deadlines and rejections

An immediate invoice can be transmitted within 12 days of the transaction, with the date of the transaction shown on the invoice. Deferred invoices, which group supplies of goods or services documented during a month, must be issued by the 15th day of the following month.

SdI performs formal checks on files, such as the validity of VAT numbers and tax codes, the structure of the XML and the consistency of amounts. If an invoice fails, SdI issues a rejection, and the invoice is treated as not issued. The supplier then has a short period, generally five days, to send a corrected invoice linked to the rejected one without it being considered late.

Because a rejection means the invoice legally does not exist, rejection monitoring is not an IT detail. Finance teams need alerts, clear ownership and a routine for correcting and resubmitting.

Consumers and foreign customers

Invoices to Italian consumers also pass through SdI. Consumers can access their electronic invoices through their personal area on the tax authority’s portal, and the supplier usually provides a paper or PDF copy as well.

For cross-border transactions, Italy replaced the separate periodic report of foreign transactions, the esterometro, with transmission of data through SdI from 1 July 2022. Invoices issued to foreign customers are sent to SdI with a generic recipient code, while purchases from foreign suppliers are reported using specific document types for integration or self-invoicing. Foreign customers still receive the invoice in the normal commercial way.

Storage

Electronic invoices must be preserved electronically in a compliant way, generally for ten years. The Agenzia delle Entrate offers a free preservation service for invoices transmitted through SdI, subject to an agreement, and many businesses use accredited providers or their accounting software.

Storage should include receipts and any related documents, and it should be possible to retrieve invoices quickly for audits and customer questions.

What systems need to handle

Italian e-invoicing is mature, and most accounting software used in Italy supports it. Problems usually arise when a company operates Italian entities from central ERP systems designed for other countries, or when e-commerce, subscription or field service systems generate invoices outside the main finance system.

Systems need to generate valid FatturaPA files with the correct document types and codes, capture customers’ recipient codes, PEC addresses and tax codes at order or onboarding, transmit through a certified channel, monitor receipts and rejections, process incoming supplier invoices from SdI into accounts payable, and preserve documents.

For companies preparing for mandates elsewhere in Europe, Italy offers useful lessons: clean master data matters more than the file format, rejections need an operational process, and invoicing systems scattered across departments must be brought into one controlled flow. This article is a general overview and not tax advice.

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