Proposal for a Council Implementing Decision authorising Italy to introduce a special measure derogating from Articles 218 and 232 of Directive 2006/112/EC on the common system of value added tax

Background and further information:

Pursuant to Article 395(1) of Directive 2006/112/EC of 28 November 2006 on the common system of value added tax ('the VAT Directive'), the Council may authorise any Member State to apply special measures for derogation from the provisions of that Directive in order to simplify the procedure for collecting VAT or to prevent certain forms of tax evasion or avoidance.

Italy submitted a request on 27 September 2017 to be authorised to apply mandatory electronic invoicing to all taxable persons established in the territory of Italy (except taxable persons benefiting from the exemption for small enterprises) and to channel the invoices through the system Sistema de interscambio ('SdI') managed by the Italian Revenue Agency.

Italy considers that the introduction of a generalized electronic invoicing obligation would provide benefits in terms of combatting fraud and evasion, as well as in terms of simplification of tax collection. According to Italy, there would be real benefits from better tax compliance and from increased timeliness and effectiveness of anti-fraud and anti-evasion controls. It would also give a boost to digitization and administrative simplification.

It is proposed to authorise the derogation from 1 July 2018 until 31 December 2021. Given the broad scope and the novelty of the derogation, it is important to ensure the necessary follow-up within the framework of this derogation and in particular the impact of the measure on combatting VAT fraud and evasion and on taxable persons. Should Italy wish to prolong the derogating measure, it is requested to provide a report on the functioning of the measure together with the prolongation request.