Electronic invoicing penalties? What consequences to fear

There are specific ways in which electronic invoices must be drawn up and also deadlines to be met for sending them. Penalties apply in the event of non-compliance or violation of the deadlines for issuing electronic invoices.

Since e-invoicing has been included as a mandatory practice for many professionals in 2019, the penalties for inadequate drafting and sending of invoices have been reduced for this year.

The so-called trial period is, however, set to end with the arrival of 2020. At present, therefore, although electronic invoicing is still a relatively new procedure, care must be taken not to violate the regulations on issuing electronic invoices.

However, what are the penalties for incorrect e-invoicing currently in force? Let's take a closer look at them.

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Electronic invoicing: the rules to respect

Electronic invoicing has become a mandatory practice for all VAT holders as of 1 January 2019. The only persons excluded from this obligation to date are members of the flat-rate scheme or agricultural producers.

Electronic invoices must contain certain information, must be drafted according to a specific template, and must use a particular format (XML). In particular, electronic invoices must contain at least the following data:

• The date of issue of the invoice;
• The sequential number under which the invoice was issued;
• The identification data of the issuer;
• The identification data of the recipient;
• The description of the quality, quantity and price of the goods concerned;
• The taxable VAT and its calculation;
• The invoice total.

What does the law say? A look at the regulations in force

The issuance and transmission of electronic invoices is regulated, specifically, by two regulations:

1. Article 6 of Legislative Decree 471/1997;
2. Article 6 of Legislative Decree 472/1997.

By what deadline must invoices be issued? → Submission deadline

Electronic invoices must be sent to the Sistema di Intercambio (SdI) within two different time limits, depending on the type of document drafted.

• Within 12 days from the date of issue of the invoice, in the case of an immediate invoice;
• By the 15th day of the month following the invoice date, in the case of a deferred invoice.

What is thepenalty regime for electronic invoicing?

Penalties are foreseen for incorrectly sent e-invoices in the case of:

• Errors in compiling the invoice;
• Omissions when compiling the invoice;
• A late issue of the e-invoice.

☝ If several deadlines are violated at the same time, the penalties will be issued in a single block, according to the principle of ' legal cumulation'.

Let us now look at the sanctions regime currently in force.

There are several possible violations of the e-Invoicing regulations . Depending on their nature, different types of penalties are incurred.

The penalties for wrongly issued e-invoices are as follows:

→ If: the error on the e-invoice occurs with no consequence on the correct settlement of VAT, a penalty of between EUR 250 and EUR 2,000 is incurred.

→ If: there are omissions, late sending or content errors, a penalty of between 90% and 180% of the tax is applied, which is equivalent to a minimum amount of €500.

→ If: non-taxable amounts not subject to VAT or with reverse charge are registered, the penalty is 5% to 10% of the amount, whereby the minimum amount is also here EUR 500.

☝ In the case of purely formal violations, no sanction is provided for, in accordance with Article 6 paragraph 5-bis of Legislative Decree 472/1997.

New in 2021

As from 2021, new codes have come into force:

• To identify the type of document: these increase from 7 to 18;
• "Nature of Transaction": these increase from 7 to 21.

An incorrect entry of the codes is to be considered as a formal error in the issuance of the invoice. As we have just seen, according to paragraphs 1 and 2 of Article 6 of the 1997 Legislative Decree, the penalty is a fine of between 250 and 2000 euros.

How to regularise an unissued invoice? The regularisation procedure

In the event of errors or omissions, it is possible to regularise, i.e. make corrections to, invoices issued by means of the institute of the 'ravvedimento operoso'. This possibility is confirmed by Article 13 of the 1997 Legislative Decree, which was amended in 2016.

In the case of rectification of violations, or ' ravvedimento operoso', it is possible to obtain a reduction of the penalties for such violations. The reductions vary according to the amount of time elapsed between the breach and the rectification made by the taxpayer.

There are, in fact, different types of voluntary amends:

• The short reprimand: if the rectification is made within 30 days of the violation being committed. In this case, the penalty will be 1/10 of the minimum.
• The long repentance: if the correction is made between the 31st and 90th day after the due date. In this case, 1/9 of the minimum shall apply.
• The long or annual remission: which covers the period between the 91st day and the deadline for submitting the declaration for the current year. In this case the penalty is 1/8 of the minimum.
• Repayment beyond the year: where the correction is made before the deadline for filing the declaration of the following year. The sanction in this case is 1/7th of the minimum.
• Repayment beyond two years: if the correction is made within two years of the violation being committed. The fine here corresponds to 1/6 of the minimum.
• Reprimand after contestation: if the infringement is contested by the Revenue Office. In this case a penalty corresponding to 1/5 of the minimum is applied.

👉 With the 1997 Legislative Decree, two new levels of reprimand were introduced, applicable in the case of:

• The correction takes place within 90 days of the due date, then there is a reduction of the penalty by half;
• Payment is made within 15 days of the due date, then the reduction is 1/15th of the penalty.

How to calculate the penalty for late e-invoicing?

Are you afraid of a penalty but do not know how much the penalty would amount to? For quarterly taxpayers, Article 1 paragraph 6 of Legislative Decree 127/2015 speaks clearly:

Whoever infringes the obligations relating to the documentation and registration of taxable transactions for the purposes of value added tax or the identification of specific products shall be punished with an administrative sanction of between ninety and one hundred and eighty percent of the tax relating to the taxable amount incorrectly documented or registered during the financial year

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How must penalties be paid?

Payment of penalties must necessarily be made by filling in the F24 form made available on the Revenue Agency website. In particular, the Treasury section must be filled in, specifying tax code 8911.

Now that you are duly informed of the risks involved in not properly drafting and transmitting an electronic invoice... good luck managing your invoicing machine! If you need clarification or have any questions, please do not hesitate to contact our team. Leave a comment in the appropriate section, you will receive a reply from us as soon as possible!