Electronic invoicing penalties? What consequences to fear

There are specific ways in which electronic invoices must be prepared and also deadlines to be met for sending them. There are penalties for non-compliance or violation of the deadlines for issuing electronic invoices.

Since e-invoicing has been included as a mandatory practice for many professional entities in 2019, penalties for inadequacies in preparing and sending invoices have been reduced for this year.

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

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

See all software Accounting & Finance

Electronic invoicing: the rules to comply with

Electronic invoicing has become a mandatory practice for all VAT holders as of January 1, 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 prepared following a specific template, and must use a particular format (XML). Specifically, electronic invoices must contain at least the following data:

• The date the invoice was issued;
• 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 in question;
• The taxable VAT and the related tax calculation;
• The total amount of the invoice.

What does the law say? Look at the current regulations

The issuance and transmission of electronic invoices is specifically regulated 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) respecting two distinct time limits, depending on the type of document drafted.

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

What is thePenalty Regime for electronic invoicing?

Penalties are provided for incorrect sending of the electronic invoice in case of:

• Errors related to the completion of the invoice;
• Omissions in the course of filling out the invoice;
• A late issuance of the electronic invoice.

☝ In case of violation of several deadlines at the same time, penalties will be issued in one block, according to the principle of " legal cumulation."

Let's now look at the penalty regime currently in force.

There are several possible violations of the electronic invoicing regulations . Depending on their nature, different types of penalties are accrued.

The penalties for wrongly issued electronic invoices are as follows:

→ If: the error on electronic invoicing occurs with no consequence on the correct settlement of VAT, there is a penalty worth between 250 euros and 2,000 euros.

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

→ If: non-taxable amounts not subject to VAT or with reverse charge are registered, the penalty is of value from 5% up to 10% of the corresponding amount, where the minimum amount is also here 500 euros.

☝ In case of only formal violations, there is no penalty, according to Article 6 paragraph 5-bis of Legislative Decree 472/1997.

News 2021

As of 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 just seen, according to paragraphs 1 and 2 of Article 6 of the 1997 Legislative Decree, the penalty provided is, therefore, a fine of between 250 and 2,000 euros.

How to regularize an unissued invoice? The voluntary repentance

In case of errors or omissions, it is possible to regularise, i.e. make corrections, to the invoices issued through the institution of the voluntary repentance. This possibility is confirmed by Article 13 of the Legislative Decree of 1997, later corrected in 2016.

In the case of rectification of violations, or an industrious repentance, it is possible to obtain a reduction in the penalties provided for these violations. The reductions vary depending on the amount of time elapsed between the violation and the rectification made by the taxpayer.

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

• Short repentance: if the rectification is made within 30 days of the completed violation. In this case the penalty will correspond to 1/10 of the minimum.
• The long repentance: if the rectification is made from the 31st to the 90th day after the due date. In this case 1/9 of the minimum applies.
• The long or annual reprimand: which includes the period between the 91st day and the deadline for submission of the current year's return. In this case the penalty is 1/8 of the minimum.
• Repayment beyond the year: if the correction is made by the deadline for submission of the next year's return. The penalty in this case is relative to 1/7 of the minimum.
• Repentance beyond two years: if the rectification is made within two years of the violation committed. The fine here is relative to 1/6 of the minimum.
• The post contestation repentance: if the violations are contested by the Internal Revenue Service. In this case, a penalty corresponding to 1/5 of the minimum is applied.

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

• 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 provided is 1/15 of the penalty.

How to calculate the penalty for late issuance of electronic invoice?

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

Any person who violates the obligations relating to the documentation and registration of taxable transactions for the purposes of value added tax or the identification of certain products shall be punished with an administrative penalty of between ninety and one hundred and eighty percent of the tax relating to the taxable amount not properly documented or registered during the fiscal year

See all software Accounting & Finance

How should payment of penalties be made?

Payment of penalties must necessarily be made by filling out the F24 form made available from the Revenue Agency Website. In particular, in it, the treasury section should be filled in with specification of tax code 8911.

Now that you are duly informed about the risks involved in not properly drafting and transmitting an electronic invoice correctly...good luck running 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 response from us as soon as possible!