SAP add-on to meet this Italian tax reporting requirement
Cross-border invoices are currently reported via the Esterometro system. That will change starting January 1, 2022, as Esterometro will no longer apply as you must send all cross-border invoices via Sistema di Interscambio (SdI). The format used for submitting invoices is the FatturaPa format. For incoming cross-border invoices, the reverse charge mechanism applies for these invoices, meaning that the vendor (your company) should self-assess the VAT and claim the VAT as input VAT in the same VAT return (assuming you have 100% right of VAT deduction).
The technical specifications were recently published on July 2, 2021, and updated on July 7, 2021. KGT has developed an SAP add-n that contains an extractor and a cockpit for these cross-border new document scenarios, and those scenarios can be submitted automatically to meet this Italian tax reporting requirement.
Some background and actions you could undertake
All domestic transactions are currently sent to the Italian Revenue Agency via SdI, and you have purchased and installed our SAP solution to meet this tax requirement. The maintenance contract closed relate to tax requirement changes to solely domestic invoices and bug fixes of the software to those invoices when applicable. The Esterometro requirement to the Portal does, therefore, not qualify as maintenance of the SAP add-on already purchased. Esterometro is a different tax reporting requirement, that you meet with a solution not purchased from us.
The current change is that Esterometro is abandoned, and from January 1, 2022, cross-border transactions now have to be reported via the same Portal 'SdI' in FatturaPa format. KGT is developing aan DAP add-on module for this tax reporting requirement.
Actions you can already take. You can assess the current Esterometro process from SAP to tax reporting submission. That should give valuable information. For configuration purposes, we should be able to identify these cross-border invoices both in your sales and purchase invoices in SD/FI in your SAP setup. That should typically not result in problems. These transitions are currently reported in Esterometro, and it is pretty standard that specific tax codes are set up for these transactions. However, to avoid any delays during config, KGT recommends checking with the business if the business makes any manual corrections regarding these cross-border transactions during the preparation of the VAT return. If that applies, SAP itself is not operating as it should and needs to be remediated first.
