Italy E-Invoicing: FatturaPA Guide for Non-Italian Businesses

FatturaPA is Italy's mandatory electronic invoice XML format, required for all domestic B2B transactions since January 2019 and cross-border transactions since July 2022. Every invoice passes through the SDI (Sistema di Interscambio) for tax authority validation before reaching the buyer. Non-Italian businesses that receive these invoices face self-invoicing obligations and must meet 10-year digital archiving requirements.

Most English-language resources on Italy e-invoicing requirements focus on the issuing side, walking Italian businesses through how to generate and transmit FatturaPA files. This guide takes the opposite approach. If your Italian supplier has sent you a FatturaPA invoice, you need to know what that XML contains, what compliance obligations fall on you as the receiver, and how to extract and process the data for your own accounting workflows. Whether you run an AP department handling Italian supplier invoices, advise clients with Italian operations, or oversee finance for a company buying from Italy, the receiver's perspective is where the practical gaps are. For a global overview of e-invoicing mandates beyond Italy, our multi-country guide covers the broader regulatory picture.

This article walks through the mechanics of the SDI clearance system and what it means for invoice recipients, maps the FatturaPA XML fields that matter most for AP processing, explains when foreign companies must issue self-invoices through SDI, breaks down the cross-border rules that took effect in July 2022, details the 10-year digital archiving requirements under AgID, and outlines the penalty framework for Italy electronic invoice compliance failures.

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How Italy's SDI Clearance System Works

Every FatturaPA invoice issued in Italy must pass through the SDI (Sistema di Interscambio) before it reaches the buyer. The SDI is operated by the Agenzia delle Entrate, Italy's Revenue Agency, and it functions as a mandatory clearance gateway: each invoice is validated by the tax authority in real time before delivery. This is fundamentally different from the post-audit model used in most other countries, where invoices flow directly between trading partners and tax authorities review them later.

For non-Italian businesses receiving invoices from Italian suppliers, the process works like this:

1. Your Italian supplier generates a FatturaPA XML invoice and submits it to the SDI.
2. The SDI validates the invoice against structural and data requirements, checking format compliance, tax identification numbers, and schema integrity.
3. Once validated, the SDI delivers the invoice to you through your registered Codice Destinatario (a 7-character recipient code) or your PEC (Posta Elettronica Certificata, Italy's certified email system). Non-Italian companies typically obtain a Codice Destinatario through an e-invoicing intermediary or their ERP provider's SDI connectivity module, rather than registering directly with the Agenzia delle Entrate.

The invoice you receive has already cleared Italy's tax authority. That distinction matters.

What happens when the SDI rejects an invoice? The SDI returns a rejection notification (Notifica di Scarto) to the supplier with a specific error code. Common rejection reasons include an incorrect Codice Fiscale (tax ID), an invalid VAT number, XML schema violations, or a duplicate invoice number. From your perspective as the receiver, a rejected invoice never reaches you. Your supplier must correct the error and resubmit. If an expected invoice has not arrived, SDI rejection on the supplier's side is a likely explanation.

The acceptance timeline. After the SDI delivers a validated invoice to you, a window opens for acceptance or decline. If you send no response within the deadline, the invoice is treated as automatically accepted. Your AP team should factor this timeline into its processing workflow to avoid passive acceptance of invoices that contain commercial errors.

What SDI validation does and does not guarantee. The SDI's pre-delivery validation confirms that a FatturaPA invoice meets Italy's structural and format requirements. It verifies tax IDs, checks XML schema compliance, and prevents duplicates. What it does not verify is commercial accuracy: whether the line items match your purchase order, whether the amounts are correct, or whether the goods and services were actually delivered. That verification remains your AP team's responsibility.

The system's impact on compliance is measurable. According to European Commission VAT gap data, Italy's VAT compliance gap decreased from 19.3% to 15.0% between 2019 and 2023, a period that coincides directly with the rollout of mandatory e-invoicing through the SDI. Real-time clearance creates a structural barrier to invoice fraud and underreporting that post-audit systems cannot replicate.

With an understanding of how FatturaPA invoices reach you through the SDI, the next practical question is which fields inside that XML file actually matter for AP processing and reconciliation.

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FatturaPA XML Fields That Matter for AP Processing

The full FatturaPA XML schema contains roughly 200 fields covering everything from digital signatures to transmission metadata. Most of those fields exist for SDI routing and Italian regulatory purposes. As a receiver, your AP team needs a focused subset for three core tasks: payment processing, three-way matching, and VAT reconciliation.

Here are the FatturaPA XML fields organized by what they do for your AP workflow.

Document Identification (DatiGeneraliDocumento)

This parent element holds the basics you need to log every invoice:

• TipoDocumento - The document type code. TD01 is a standard invoice, TD04 is a credit note (Nota di Credito), and TD05 is a debit note. Your ERP mapping should flag TD04 and TD05 documents for separate processing, since credit notes reverse charges rather than create new payables. For a deeper look at how credit notes differ from standard invoices, including reconciliation workflows, that distinction matters for accurate ledger entries.
• Data - The invoice date in YYYY-MM-DD format. This is the tax point date for IVA (Italian VAT) purposes, not necessarily the date the invoice was transmitted through SDI.
• Numero - The invoice number assigned by the supplier. Italian invoicing law requires sequential numbering, so gaps in the sequence from a single supplier may indicate missing documents.
• Divisa - The three-letter ISO 4217 currency code. Most Italian domestic invoices use EUR, but cross-border invoices may use other currencies.

Supplier Details (CedentePrestatore)

This block identifies who sent the invoice:

• IdFiscaleIVA - The supplier's VAT identification number, structured as a country code (IT) followed by the number. This is your primary key for vendor matching.
• CodiceFiscale - The Italian tax code, which differs from the VAT number for sole proprietors and certain entity types. Some suppliers populate both fields.
• Denominazione or Nome/Cognome - The supplier's registered legal name (or first/last name for individual suppliers). Cross-reference this against your vendor master file, keeping in mind that the registered name may differ from the trading name you know.
• Sede - The supplier's registered office address, including Indirizzo (street), CAP (postal code), Comune (city), and Nazione (country code).

Buyer Details (CessionarioCommittente)

This section contains your own company's details as registered with the Italian supplier. Verify that the VAT number and legal name match your records. Mismatches here can indicate the invoice was intended for a different entity within your group or that the supplier has outdated registration data.

Line Items (DatiBeniServizi/DettaglioLinee)

Each DettaglioLinee element represents one line item on the invoice:

• Descrizione - The item or service description, in Italian. This is the field your AP team needs to match against purchase orders.
• Quantita - Quantity delivered or hours billed.
• PrezzoUnitario - Unit price before tax.
• PrezzoTotale - Line total (quantity multiplied by unit price, adjusted for any discounts).
• AliquotaIVA - The IVA rate applied to this line, expressed as a percentage (e.g., 22.00 for the standard rate, 10.00 or 4.00 for reduced rates, 0.00 for exempt transactions).

VAT Summary (DatiRiepilogo)

The DatiRiepilogo section aggregates tax calculations across all line items sharing the same IVA rate:

• AliquotaIVA - The VAT rate for this summary group.
• ImponibileImporto - The total taxable amount at this rate.
• Imposta - The total IVA amount calculated on that base.

Cross-check these totals against the sum of your line items. Discrepancies between the line-level AliquotaIVA values and the DatiRiepilogo totals are a common source of reconciliation errors, particularly when invoices include mixed VAT rates.

Payment Information (DatiPagamento)

This block tells you when and how to pay:

• CondizioniPagamento - Payment terms code (e.g., TP02 for full payment, TP01 for installments).
• ModalitaPagamento - Payment method code. MP05 indicates bank transfer (bonifico), which is the most common method for B2B transactions. Your AP team should map these codes to your internal payment methods.
• DataScadenzaPagamento - The payment due date. This drives your cash flow forecasting and aging reports.
• ImportoPagamento - The amount due for this payment installment.

The Data Extraction Challenge for Non-Italian Teams

For AP departments that process invoices from suppliers across multiple countries, FatturaPA presents a specific operational problem. The XML format uses Italian field names throughout, line item descriptions arrive in Italian, and the document type and payment method codes follow Italian conventions rather than international standards. Teams already handling processing invoices in multiple languages and currencies from other EU suppliers face an additional layer of complexity with FatturaPA's XML structure, which cannot be reviewed the same way as a standard PDF invoice.

Manual XML parsing is not viable at scale. Platforms like Invoice Data Extraction let AP teams extract structured data from FatturaPA invoices by uploading batches of Italian supplier documents and using natural language prompts to specify the exact fields needed - for example, "Extract invoice number, date, vendor name, net amount, IVA amount, and total from these FatturaPA invoices." With support for up to 6,000 files per batch and built-in multi-language processing, the output arrives as structured Excel or CSV ready for ERP import.

Beyond processing the invoices you receive, non-Italian companies may face an additional compliance layer: the obligation to generate their own FatturaPA documents and submit them through SDI under Italy's self-invoicing (autofattura) rules.

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Self-Invoicing (Autofattura): When Foreign Companies Must Issue Through SDI

Most non-Italian businesses expect to only receive e-invoices from Italian suppliers. The autofattura obligation flips that assumption: in specific scenarios, your company must generate and submit a FatturaPA XML document to SDI, effectively invoicing yourself.

Autofattura (self-invoicing) is the mechanism Italy uses to enforce VAT reverse charge reporting through its e-invoicing infrastructure. Rather than declaring reverse charge VAT solely through periodic VAT returns, the Agenzia delle Entrate requires the transaction to be documented as a structured FatturaPA submission through SDI. This creates a real-time audit trail for cross-border and domestic reverse charge transactions that would otherwise exist only in accounting ledgers.

When your company must issue an autofattura through SDI:

• Intra-EU goods acquisitions. If your company has an Italian VAT registration or permanent establishment and purchases goods from suppliers in other EU member states for use in Italian operations, you must generate a self-invoice to document the reverse charge VAT on that acquisition.
• Services received from non-established suppliers. When your Italian-registered entity receives services from a supplier not established in Italy, whether that supplier is based in another EU country or outside the EU entirely, you must issue an autofattura through SDI for the reverse charge.
• Domestic supplier failure to invoice. If an Italian supplier does not issue a compliant FatturaPA invoice within the legally required timeframe, the buyer is obligated to generate a regularization self-invoice. This is a protective mechanism: rather than absorbing the compliance risk of a supplier's failure, you document the transaction yourself.

Document type codes for self-invoices:

Each scenario maps to a specific TipoDocumento code in the FatturaPA XML, and using the wrong code will trigger rejection or compliance flags:

• TD16 - Reverse charge integration for domestic purchases (used when applying reverse charge on Italian domestic transactions)
• TD17 - Integration for services received from EU or non-EU suppliers not established in Italy
• TD18 - Integration for intra-EU goods acquisitions
• TD19 - Integration for goods imported through customs

Submission deadline: Self-invoices must generally be transmitted through SDI by the 15th of the month following the month in which the transaction occurred. This deadline aligns with inclusion in the correct VAT liquidation period. Missing it does not eliminate the obligation but creates exposure to late-filing penalties.

The critical point many foreign companies miss: this requirement means your organization needs the capability to produce FatturaPA-compliant XML and transmit it through SDI, not merely consume incoming invoices. Businesses without this capability often discover the autofattura obligation only when the Agenzia delle Entrate issues a non-compliance notification, at which point penalties and back-filing are already on the table.

This self-invoicing framework is tightly connected to Italy's broader cross-border e-invoicing rules, which underwent a significant expansion in July 2022 that extended SDI obligations to transactions that were previously reported through other channels.

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Cross-Border E-Invoicing Rules Since July 2022

Before July 2022, Italy's mandatory e-invoicing through SDI applied only to domestic B2B and B2C transactions. Cross-border invoice data was reported separately through Esterometro, a quarterly filing mechanism that Italian businesses used to declare purchases from and sales to non-Italian parties. The system worked, but it created a parallel reporting track that operated on different timelines and formats than the core SDI infrastructure.

That changed on 1 July 2022, when Italy extended mandatory FatturaPA e-invoicing through SDI to cross-border transactions. Italian businesses must now transmit cross-border transaction data using FatturaPA XML document types directly through SDI, effectively replacing the separate Esterometro filing for the vast majority of transactions. Some residual Esterometro obligations remain for narrow edge cases, but the general direction is clear: SDI is the single reporting channel for both domestic and international invoice data.

What This Means for Non-Italian Businesses

For EU companies trading with Italian suppliers, the practical effect is straightforward. Your Italian suppliers now transmit cross-border invoice data through SDI as part of their compliance obligations. If your company has a registered Codice Destinatario (the 7-character SDI routing code), you may receive invoices as FatturaPA XML directly from the system. In many cases, suppliers also send invoices in parallel formats like PDF or through Peppol. Regardless of which format you receive for your own processing, the FatturaPA XML transmitted through SDI is the legally authoritative version for Italian tax purposes.

Italy also supports Peppol as a delivery channel, particularly for B2G (business-to-government) invoicing and increasingly for B2B transactions. For non-Italian companies already connected to the Peppol network, this can serve as a complementary channel for receiving Italian invoices. But Peppol does not replace SDI. The clearance and tax validation still happens through the Italian system, and SDI remains the primary mechanism for Italy cross-border e-invoicing compliance.

What Changed Operationally

Before July 2022, your Italian supplier's cross-border invoices may have arrived only as PDFs, with the Italian tax reporting handled separately through Esterometro. Now, those same transactions generate FatturaPA XML through SDI. If your company has a registered Codice Destinatario, you will receive the structured XML directly. If not, the FatturaPA XML still exists as the legally authoritative version on the Agenzia delle Entrate's portal, even if your supplier also sends you a PDF copy.

For AP teams, this means structured processing of Italian XML invoices is now a practical necessity for cross-border transactions, not just a domestic Italian concern. The self-invoicing obligations covered in the previous section are also now enforced through SDI rather than separate Esterometro filings, which tightens compliance timelines and increases visibility for the tax authority.

Beyond processing and reporting, Italy also imposes some of the most stringent archiving requirements in the EU for electronic invoices.

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Italy's 10-Year Digital Archiving Requirements Under AgID

Italian law requires that every FatturaPA invoice, whether sent or received through SDI, must be digitally archived for a minimum of 10 years. This obligation applies to any entity holding an Italian VAT registration, including non-Italian companies that have registered for VAT in Italy due to a permanent establishment, fixed place of business, or voluntary registration.

The agency responsible for setting the technical standards behind this requirement is AgID (Agenzia per l'Italia Digitale). AgID governs what is known as conservazione sostitutiva (substitute preservation), a framework that goes well beyond keeping a copy of an invoice on a shared drive or in an email folder. Compliant archiving must guarantee three things: document integrity verified through qualified electronic signatures, time-stamping that proves when the document was archived, and a full audit trail that demonstrates the archive has not been tampered with over the retention period.

This distinction catches many foreign companies off guard. In most European countries, invoice retention periods range from 5 to 7 years, and storing a PDF or spreadsheet extract of invoice data is generally sufficient. Italy's requirements are materially different. The original FatturaPA XML file must be preserved in its native format with cryptographic integrity guarantees intact. A PDF printout of the invoice, an exported CSV of line items, or a screenshot stored in your ERP system does not satisfy the obligation.

Non-Italian companies have three practical paths to compliance:

• Agenzia delle Entrate's free archiving service. The Italian tax authority offers compliant digital archiving at no cost for invoices that pass through SDI. However, this is not automatic. Companies must actively opt in to the service through the Agenzia delle Entrate portal. Once activated, invoices transmitted via SDI are archived in a format that meets AgID's technical specifications.

• Third-party certified providers. Many companies contract with an AgID-certified archiving provider (conservatore accreditato) that handles the full chain of compliance: ingestion of FatturaPA XML files, application of qualified electronic signatures, time-stamping, and long-term preservation. This is the most common approach for foreign businesses that want a hands-off solution managed by specialists familiar with Italian regulations.

• Internal archiving systems. Building and maintaining an in-house system that meets AgID's technical specifications is possible but typically practical only for large organizations with dedicated IT infrastructure and compliance teams. The system must support qualified electronic signatures, certified time-stamps, and produce archiving packets (pacchetti di archiviazione) that conform to AgID's published standards.

For most non-Italian businesses, the choice comes down to the free government service or a certified third-party provider. The government option works well for companies with straightforward invoice volumes, while third-party providers offer more flexibility for organizations managing high volumes or complex multi-country archiving workflows.

Regardless of the method chosen, the 10-year clock starts from the date the invoice is registered in the company's accounting records, not from the date of invoice issuance.

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Penalties for E-Invoicing Non-Compliance

Italy's penalty framework for e-invoicing violations is structured around the unreported or incorrectly reported VAT amount. Understanding these ranges helps non-Italian businesses quantify their actual compliance risk rather than treating it as an abstract concern.

Failure to issue or incorrect FatturaPA invoices carries penalties between 5% and 10% of the unreported VAT amount, with a minimum of EUR 500 per invoice. This applies whether the invoice was never transmitted through SDI, sent in the wrong format, or contained materially incorrect data in required fields. For companies processing high volumes of Italian transactions, even a small percentage of non-compliant invoices can accumulate significant exposure.

Self-invoicing (autofattura) penalties follow the same structure. Non-Italian companies that fail to generate the required autofattura within the prescribed deadline face the 5%-10% penalty range. Where a late self-invoice does not ultimately affect the VAT calculation, a reduced fixed penalty may apply, but the obligation to file correctly and on time remains.

Archiving violations create a different category of risk. Failure to maintain compliant digital archives under AgID standards can trigger additional fines during tax audits conducted by the Agenzia delle Entrate. Beyond direct penalties, non-compliant archiving may compromise a company's ability to substantiate input VAT deductions, effectively turning an administrative failure into a financial loss on claimed credits.

Voluntary correction through ravvedimento operoso offers a meaningful incentive for early self-remediation. Italy's voluntary regularization mechanism allows companies to reduce penalties substantially by self-correcting errors and filing corrected documents within defined timeframes. Correction within 90 days of the original deadline can reduce the penalty to approximately 1/9 of the standard amount. The reduction diminishes as time passes, making prompt identification and correction of errors critical.

Beyond direct financial penalties, non-Italian businesses should account for the practical costs of non-compliance: strained relationships with Italian suppliers who depend on clean SDI transmission records, delayed invoice processing that disrupts payment cycles, and heightened audit risk from the Agenzia delle Entrate. Establishing compliant workflows from the outset, including structured pre-accounting workflows for received invoices, is consistently more cost-effective than after-the-fact remediation.

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Practical Next Steps for Non-Italian Businesses

Italy's e-invoicing system is the most mature in the EU, with over seven years of mandatory operation behind it. The requirements are well-established and stable rather than experimental, which means the compliance processes your company sets up now will serve you for the foreseeable future. That stability is an advantage: you can invest in getting this right once rather than chasing a moving target.

For non-Italian businesses that receive FatturaPA invoices from Italian suppliers, here is a prioritized action list:

1. Register your Codice Destinatario or PEC. Confirm with each Italian supplier that they have your correct seven-character recipient code or certified email address for SDI delivery. If you do not yet have a Codice Destinatario, coordinate with your ERP provider or an intermediary that offers SDI connectivity. Without a registered delivery channel, your invoices will default to the supplier's tax drawer on the Agenzia delle Entrate portal, creating delays and manual retrieval work for your AP team.

2. Establish a data extraction process. FatturaPA invoices arrive as structured XML, not PDFs. Set up a reliable method for extracting the key AP fields (invoice number, dates, supplier tax ID, line item amounts, IVA breakdown by rate, payment terms and due dates, and bank details) into your accounting system or working spreadsheets. Automated extraction eliminates the manual re-keying that causes matching errors and payment delays. This is where the Italy e-invoicing requirements actually create an opportunity: because the data is already structured, extraction can be fully automated with the right tooling.

3. Assess your self-invoicing obligations. Determine whether your business activities trigger autofattura requirements. Intra-EU goods acquisitions, services received from suppliers not established in Italy, and imports all carry self-invoicing obligations that must be fulfilled through SDI. If any of these apply, engage a compliance provider or intermediary with SDI access to handle the TD17, TD18, or TD19 document types on your behalf. Missing the self-invoicing deadline creates direct penalty exposure.

4. Verify your archiving compliance. Confirm that your FatturaPA invoices are being stored in a system that meets AgID's 10-year digital preservation standards, including time-stamped integrity seals and metadata retention. If you do not already have a compliant archiving solution, consider opting into the Agenzia delle Entrate's free conservation service for invoices processed through SDI. It meets the AgID requirements at no cost and removes the need for a separate qualified archiving provider.

5. Review your Italian VAT position. If your company has Italian operations, an Italian VAT registration, or significant Italian trade volume, consult with an Italian tax advisor to confirm your full set of obligations under current Italy electronic invoice compliance rules. The interaction between e-invoicing, VAT reporting (Esterometro elimination), and self-invoicing creates dependencies that vary based on your specific business structure and transaction types.

Looking ahead, the compliance infrastructure you build for Italy's FatturaPA system will be directly relevant beyond Italian borders. The EU's VAT in the Digital Age (ViDA) initiative is moving toward harmonized e-invoicing standards across all member states, with structured electronic invoicing and real-time digital reporting at its core. Companies that have already adapted their AP workflows to handle structured XML invoices, automated data extraction, and digital archiving for Italy will be well-positioned when similar requirements take effect in other EU countries.