Electronic invoicing and lottery tickets: How Italy wants to combat tax evasion

Milan, 2019-04-01

In Italy, electronic invoicing became mandatory on 1 January 2019. Previously, this obligation existed only in the B2G relationship. Since the beginning of the year, all B2B and B2C invoices in Italy must now be issued electronically and in XML format and sent electronically to a virtual platform linked to the tax office from where they are then forwarded to the respective recipient.

The main objective of this innovation first and foremost is to combat tax evasion but also to simplify and improve the organization of the Italian tax administration.

Within the European Union, Italy, together with Portugal, is the only country to have introduced such a comprehensive commitment. Apart from public procurement, where electronic invoicing is obligatory (see Directive 55/2014, to be implemented by the member states by 27 November 2018), European legislation so far only stipulates that electronic invoicing must be an option.

As of 1 January 2020, the electronic receipt will also become mandatory in Italy, which, like the electronic invoices, must be sent to the platform linked to the tax office.

It is well known that the Italian tax authorities have been trying for decades to control tax evasion. In order to ensure that businesses properly issue invoices or receipts for the sale of goods or the provision of services, the Italian legislator has tried, among other things, to put pressure on purchasers by requiring them to have an invoice or receipt issued. In fact, even today, when a restaurant visitor leaves the premises, financial police officers waiting outside may ask him to show the bill or receipt. Until 2003, the customer who could not present the receipt could even be fined.

From next year on, citizens will be given an incentive to insist on the issuance of a proper receipt with the so-called Lotteria scontrini: Each electronic receipt is to represent a ticket for a state lottery and participate in a lottery.

It remains to be seen whether the Italian state will succeed in combating tax evasion with this measure.

Author: Dr. Stefanie Mehrens, Attorney at law