What are the types of invoices in the tax system?

The invoice is a mandatory accounting document for all VAT holders. Simply put, anyone who sells products or offers certain services cannot escape the tax obligation to issue an invoice.

Invoices, however, are not all the same. In fact, there are different types. In this article, we will look together at what types of invoices are provided for by the Italian tax authorities.

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How to issue an invoice: what are they?

As mentioned, there are various types of invoice. Although these types of invoices have different characteristics, they are issued in the same way.

The ways of issuing invoices correspond to the systems of:

• Traditional invoicing: in which invoices are issued in paper format and are produced by manual or software-mediated data input on media such as pdf, excel, jpeg, etc.
• Electronic invoicing: in which invoices are drafted and issued necessarily compiled following certain criteria imposed by regulations and through the use of specific software.

As of 1 January 2019, the obligation to apply electronic invoicing has been extended. Until this time limit, the need for electronic invoices was relegated to the sphere of public administration. However, since 2019, private persons have also been obliged to adopt the e-invoicing system. An exception to this rule are professionals belonging to the flat-rate scheme.

The content of the invoice, in the two issuing methods just seen, is practically identical: the only difference is the recipient code. This information, in fact, is only to be entered on the electronic invoice.

✎ How to fill out an invoice correctly? The data to be entered

Every invoice, therefore, whichever method of issue you choose, requires certain data to be entered. This information to be entered is the same whatever the type of invoice: it must not be missing, otherwise the document will be invalid for tax purposes.

The data to be entered and which must necessarily be present are:

• Data relating to the issuer of the invoice (name and surname, address of registered office, VAT number, tax code);
• The data relating to the recipient of the invoice (name and surname, address of registered office, VAT number, tax code);
• The sequential number: from the beginning of the year, invoices must be numbered consecutively, starting with number 1;
• The description of the good sold or service provided to which the invoice refers;
• The amount of VAT, i.e. how much payment is made with and without VAT.

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💬 What are the types of invoice?

Let us now see, however, what types of invoice exist under Italian tax law.

The Italian tax authorities identify different types of invoice on the basis of their fiscal function . Below is a list:

👀 Immediate invoice

As its name suggests, an immediate invoice is a tax document that is issued and sent (or delivered) immediately. This means that it is delivered within a short time of the sale of the good or provision of the service. In this case, 'immediately' means within 12 days of delivery of the good or provision of the service.

The timeframe for issuing the invoice might seem quite large in relation to the definition, which, instead, would suggest an obligation to send it immediately. In fact, until 2019 (Decree-Law No. 34/2019), the law imposed a much shorter deadline for issuing immediate invoices, namely 24 hours.

☝ As a rule, the immediate invoice is only considered to have been actually issued at the time of delivery to the other party. However, there is no obligation to verify receipt.

The immediate invoice serves both as an invoice and as a document accompanying the goods while they are being transported to the customer. In fact, the immediate invoice replaces the DDT (Transport Document, i.e. a document certifying a transfer of goods from the seller to the buyer).

The ability of the immediate invoice to replace the waybill does not always exist. In fact, there are exceptions. Goods whose transport requires the presentation of a waybill are all taxable products, such as:

• Tobacco;
• Tobacco products;
• Matches;
• Alcohol;
• Alcoholic beverages;
• Electricity;
• Fuels;
• Lubricating oils.

Generally speaking, the instant invoice can be said to be the most flexible type of invoice. In fact, it is adaptable to all situations.

👀 Deferred Invoice

The deferred invoice is the tax document that is issued and dispatched (or delivered) within one month after the sale of the specific good or provision of the specific service.

The deferred invoice may be valid for several goods intended for the same customer in a given month. In fact, the deferred invoice is also called a summary invoice. In this case, however, the goods must be accompanied by the DDT in order to be transported and duly delivered to the customer.

Thus, the deferred invoice is often used to issue invoices for goods delivered during the calendar month. The possibility of drawing up a single invoice for several shipments and deliveries is particularly practical and convenient.

Normally, the deferred invoice is used in the case of frequent customer orders. For deliveries made during the month, only the delivery note or bill of lading will be drawn up. Instead, at the end of the month, the summary deferred invoice must be issued.

☝ The deferred invoice shall be delivered by the 15th day of the month following the month in which the goods were exchanged.

👀 Accompanying invoice

The accompanying invoice has a dual function: that of an invoice and an accompanying document for goods on delivery. Thus, it is a hybrid document, having the same characteristics and entailing the same obligations as both a waybill and an immediate invoice.

The accompanying invoice cannot be used to invoice a single service. In fact, in this case, the immediate invoice must be used.

👀 Down payment invoice

The invoice on account is the tax document used when the customer pays one or more amounts in advance. The down payment invoice is very flexible: it normally contains only a description , even a very simple one, and not necessarily related to the good or service for which it is issued.

Following the issuance of the down-payment invoice and, subsequently, the conclusion of the sale, the final invoice must, however, be issued, from which the amount already paid must then be subtracted.

👀 Pro forma invoice

As the name suggests, this is a pro-forma document, rather than a true invoice. Normally used for economic transactions with foreign countries, the pro-forma invo ice is, in fact, a kind of anticipation of the actual invoice which, in any case, will have to be issued later.

Thus, the pro forma invoice is a document corresponding to the invoice, but without fiscal value. It allows the customer to verify the data entered in the document and gives the possibility of correcting and rectifying them so that the issuer can draw up a correct final invoice with absolute certainty, the content of which has been approved by both parties.

The pro-forma invoice provides a way to avoid compilation errors that, in truth, can lead to heavy penalties. In addition, with the pro-forma invoice, the actual invoice can be issued after receipt of payment from the customer: in this case, no tax payment in advance is necessary.

Other Tax Documents

Within the scope of invoicing, other documents are also issued that, however, do not qualify as actual invoices. These tax documents are:

• The credit note, i.e. a document whose function is to correct or cancel an invoice already issued to the customer.
• The debit note, i.e. a document enabling the correction and supplementation of any amounts recorded on invoices already issued.
• The bill, i.e. a document corresponding to the invoice from a formal point of view, indicating the expenses relating to the services provided and the characteristics of those services.
• The bill notice, i.e. a document which, as its name suggests, serves to warn of the arrival of the bill.

  Being a genuine notice, this document has no fiscal value, but has a purely informative value. The information provided by the bill notice mainly concerns the costs of the service issued to the recipient.

• The joint invoice, i.e. a document concerning services rendered to several parties (legal or tax advice, inheritance advice, etc.).

• The advance invoice, i.e. an actual invoice meeting all the requirements of the law, but paid in advance of the transaction itself. The advance invoice is only payable in the case of a supply of goods or services.

• The gift invoice, i.e. an invoice that is issued when a good is delivered or a service is provided as a gift to the other party.

Having a clear idea of the differences between the various tax documents is important in order to be able to carry out invoicing processes correctly. Errors in the compilation or issue of tax documents, in fact, lead to the application of sanctions, even heavy ones. So... better to avoid, right?

Should you have any doubts about the content of this article or need further clarification, please do not hesitate to leave a comment in the appropriate section. We will be happy to get back to you as soon as possible!