E-Invoicing Regulations (And What They Mean for Businesses)


In Italy, SDI (Sistema Di Interscambio) is now operational, so the country will use the e-invoicing Exchange Service for local and international transactions. Regulations requiring e-invoicing became mandatory for all public entities in March 2015.

Regulations for electronic invoicing (such as SDI in Italy) simplify and standardize transaction processes and increase business activity. Invoicing is being digitized to grow the local Italian businesses and give them greater access to international markets through a uniform invoicing system.

The Codice SDI Fatturazione elettronica system will speed up the invoicing process and provide opportunities for access point service providers such as Storecove.

In this article, we will discuss SDI and why it is essential:

  1. SDI applies to whom?
  2. Italy’s SDI e-Invoicing Requirements
  3. Electronic invoices in SDI format
  4. How do I send electronic invoices to the SDI Portal?
  5. How do I store e-Invoices on SDI?
  6. In Italy, what are the penalties for not complying with SDI?
  7. Getting started with SDI and an e-Invoicing solution
  8. SDI applies to whom?

SDI mainly concerns public administrations and B2B (business to business) transactions, whether local or international. B2B organizations must also upgrade to e-invoicing following the FatturaB2B mandate. For B2C businesses, e-invoices are applicable if the customer demands them.

SDI applies to every VAT (value-added tax) business, resident or non-resident. When dealing with cross-border B2B clients, invoicing must now go through SDI.

Paper invoices for your clients will soon be a thing of the past. There is no question that this presents a challenge for business owners who may not have adequate information technology infrastructure, payment systems, and electronic billing capabilities to handle the current increase in clients.

The requirements suggest that the invoices need to be prepared, signed, and transferred through electronic means via SDI. The aim is to ensure better transparency and enhance invoicing quality.

B2G invoices

B2G (business to government) invoices are slightly different from B2B invoices regarding how they are handled. If needed, a public administration will have the right to reject the invoice generated through SDI in a B2G setting. On the other hand, a B2B setting does not allow the clients to reject an invoice that comes through SDI.

Therefore, if a business has verified for VAT, its invoices cannot be rejected. However, the system allows the generation of credit slips or credit notes if there is an error in the electronic invoices.

Italy SDI e-Invoicing Requirements

The mechanism for compliance in Italy is somewhat strict, but it promises transparency. First, businesses must convert their invoices of all private transactions to an XML or other specific formats. The format is well defined by the government and was put into effect from 1st January 2019. Once converted, the electronic invoice must go through SDI exchange to the recipients.

SDI Electronic Invoice Format

Businesses will need to submit invoices in XML, PDF, JPG, or TXT formats. Therefore, the current invoices in your ERP system must be extracted and converted to one of these formats. Once converted, businesses will send these invoices to an SDI channel for approval and transfer them to the customer accordingly.

The Italian government approved the guidelines designed to ensure that all invoices submitted for payment ultimately end up in the right hands. This step helps to provide visibility throughout the payment process and reduces costs and risks associated with manual data entry.