Optional Regime

Legislative Decree n. 127/2015, Art. 1, provides that the VAT taxpayers may opt for the data transmission of all invoices issued and received to the Tax Office.

The optional regime has a minimum duration of five years. The option for this regime has to be exercised within the December 31st of the year preceding that in which the VAT taxpayer intends to apply the optional regime. For FY 2018 the deadline is 31st December 2017.

As regards the benefit foreseen for the optional regime:

a) access to VAT refunds in priority;

b) the shortening by two years of the terms of the assessment forfeiture, only if the traceability of all payments made and received is guaranteed for amount higher than Euro 30,00.

c) “simplified procedures” for tax audit. These may be carried out "remotely", according to the provisions of the Decree of the Economic and Finance Minister of 4th August 2016, reducing the taxpayer obligations, avoiding to carry out tax checks locally and then hinder the normal course of the economic activity of the taxpayer.

The VAT Taxpayer that opt for this regime can submit data of all invoices issued and received to the Tax Office, through two alternative ways:

a) “Electronic invoices”: System of Interchange (“SDI”);

b) “Invoice Data”: electronic transmission of the data concerning the invoices issued and received to the tax office;

a) “Electronic invoices”: System of Interchange (“SDI”)

In this case the new format in which electronic invoices are produced, transmitted, stored and maintained is a digital format called XML. The electronic invoice data are acquired from the System of interchange “SDI” and the data will be automatically acquired by the Italian Tax Administration.

b) “Invoice Data”: electronic transmission to the tax office

In this case the data to be sent, the mode as well as the terms for transmission are the same foreseen for the submission of the "data of the invoices issued and received" according to the recently updated Art. 21 of Law Decree no. 78/2010.

Then, the VAT taxpayers who submit the "data of the invoices issued and received" according to the recently updated Art.21 of Law Decree no. 78/2010 can also exercise the option for the regime foreseen by art. 1 of Legislative Decree n. 127/2015 and this is sufficient to have the benefits recognized for the optional regime.

Furthermore please consider that the option is mandatory for five years, tacitly renewed at the end of the period. Due to this it’s not predictable if, in the future, the information to be communicated will be subject to a deeper level of details. In this respect please consider that the current ministerial tracks provide data (such as % of deductibility of the cost and % of deductibility of VAT) that now are optional but in the future may become mandatory and in case of exercise of the five year option you may have to fill out.