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e-Invoicing in Italy​

Electronic invoicing in Italy is built around a mandatory clearance model controlled by the tax authority. Below is a high-level overview of how it works.

Actors involved​

  1. Issuer (Supplier): The business that creates the invoice.
  2. SdI (Sistema di Interscambio): The central platform managed by the Agenzia delle Entrate. This is the mandatory hub that validates, receives, and routes invoices.
  3. Recipient (Customer): It can be (B2B: another Italian business), PA (Public Administration entity).
  4. Service Providers: Optional platforms that perform transmission to/from SdI on behalf of the issuer or recipient.

Core process flow (clearance model) in ExFlow E-Invoicing with Pagero integration​

  1. Invoice creation: The supplier generates the invoice in XML format using ExFlow Document Integration and send it via Pagero.

  2. Transmission to SdI: The XML is digitally signed and uploaded to SdI by Pagero.

  3. Validation: SdI runs a technical and fiscal compliance check, including XML format validity, structural correctness, VAT numbers, required fields and cross-checks.

  4. Acceptance or Rejection: If errors are found, SdI rejects the invoice and returns a structured error message. The message is retrived by ExFlow Document Integration and exposed to the user. The supplier user must correct and resend.

  5. Delivery to Recipient: Once validated, SdI forwards the invoice to the recipient.

  6. Storage and archiving: Both parties must preserve electronic invoices digitally according to Italian fiscal archiving rules (conservazione sostitutiva). Pagero provides a solution for it.


Assure your Pagero account contains all necessary data to connect successfully to SDI and that ExFlow Document Integration is version 1.2.2 or newer and it is completely setup to work with Pagero integration.

Clarify internal tax data​

Ensure you know for the Italian entity:

  • Partita IVA and Codice Fiscale.

  • Regime Fiscale code.

For customers:

  • Their Codice Destinatario (7-character SDI code) or PEC email.

Common D365 Finance localization & master data​

Import the SignUp provided ER Configurations and assure they are correctly setup and all required parent ER Configuration are available.

Go to Accounts receivable > Setup > Accounts receivable parameters, Electronic documents tab:

  • Set the Electronic document source / ER format for:

    • Sales and Free Text invoices,

    • Sales and Free Text credit notes,

    • Project invoices and credit notes (future release).

This tells D365 which ER configuration to use to generate the invoice XML that will be sent to SDI through Pagero integration.

Destination for XML file output​

Make sure you map the ER Configuration destination files in Organization administration / Electronic reporting / Electronic reporting destination

  • Reference: ExFlow Document Integration to Pagero IT (or the ER Configuration you may have modified.)
    • Name
    • File component name: XMLHeader
    • Settings: Archive
    • Stop processing: yes
    • Document type: Any
    • Print management action: autodetect.

In the Italian legal entity:

Go to Organization administration > Organizations > Legal entities.

On the Registration numbers fast tab, fill in:

  • Fiscal code

On the Tax registration fast tab, fill in:

  • Tax registration number

Additional Italian fields required by the D365 localization for e-invoicing, as explained by Microsoft here:

Customer master data: e-invoicing parameters​

For each customer subject to e-invoicing, ensure the country and VAT registration status are correct (this drives nature codes, reverse charge use cases, etc., but some of that is also handled via tax codes).

In the customer’s card / Invoice and delivery:

  • Fiscal code
  • Tax Exempt Number

In the customer’s Address / E-invoicing tab:

  • Authority office (Codice Destinatario): You can find the Authority office field on the Sales demographics FastTab of a customer record (go to Accounts receivable > Customers > All customers, and open the customer record in Edit mode). The value of this field is used to define the type of communication (business-to-government [B2G] or business-to-business [B2B]):

If the length of the value is 6, the customer is considered a public administration (the transmission format equals FPA12). If the length of the value is 7, the customer is considered a private company or professional (the transmission format equals FPR12). In both cases, the system enters the value of this field in the CodiceDestinatario tag in the XML file.

Set the Codice Destinatario (7-character code) for domestic B2B/B2C customers.

If the customer uses PEC instead of a code, register the PEC email.

For Public Administration customers:

  • Flag them as Government in ExFlow Document Integration, Customer.

  • Maintain the IPA code (Codice Univoco Ufficio).


Sending an invoice to non-Italian customer​

For customers that don't have any Italian registered entity and therefore, are not registered in SDI (typically customers outside Italy), the Italian regulations require that a cross-border invoice is sent to SdI for clearance. Once the clearance notification has been issued by SdI, the sender is free to send the invoice to its customer. Note: there is no special provision on how the invoice should be sent to that foreign customer. To mark a customer as an cross-border e-invoice recipient:

  1. In ExFlow Document Integration / Customer, edit the record for that customer and mark "Cross-border" to true.
  2. Click settings and add a record for "Document type" = "Cross-border invoice" (or credit note if required), Export method = Pagero.
  3. In Account Receivables, Customer card, edit the record for that customer and set the value for Authority office to "XXXXXXX" (7 X without quotation or spaces)

Tax codes, nature codes, and FatturaPA mapping​

Review Tax codes and Tax groups used for Italian invoices:

Each tax code must have:

Correct VAT rate and exemption configuration and mapping to the corresponding nature code (N1…N7) for non-taxed cases.

See https://learn.microsoft.com/en-us/dynamics365/finance/localizations/italy/emea-ita-e-invoices#natura for detail on how to setup the Nature codes.

Map:

Tax codes / exemption codes to Natura values.

Other FatturaPA attributes if provided by the localization (e.g., split payment, stamp duty applicability, etc.).

Optional Italian specifics you may need to model​

Depending on your business scenario, ensure your setup supports:

  • Stamp duty (Bollo): Ability to flag invoices that require DatiBollo and ImportoBollo (e.g., 2.00 EUR) and map them in the ER format.

  • Split payment, reverse charge, withholdings: Configure tax codes and additional FatturaPA tags for:

    • Split payment (scissione pagamenti) for PA.
    • Reverse charge and relevant Natura codes.
    • Withholding tax scenarios.