Introduction
In this episode of VAT Talks we have the honour to speak with Antonino Caccamo who is CTO and co-founder of A-Cube API, an Italian e-invoicing service provider. Previously A-Cube and summitto launched a pilot, showing that summitto’s TX++ could be integrated as corner 5 in a Peppol CTC model. Continue reading to learn more about the Italian e-invoicing system and the Peppol network, and why we should “embrace the revolution” according to Antonino!
How did you end up in the area of e-invoicing and what do you like so much about it?
“In 2019, a new obligation arrived in Italy from the government: mandatory e-invoicing for everyone. At that time I was a VAT number holder as a freelancer, so I researched how this was supposed to work, and it turned out that it was not an easy task to communicate with the tax authority. Hence the idea of creating a technical product to simplify this kind of communication. I love being in the middle of this digitisation revolution because I believe the benefits will be huge for everyone, from private companies to governments to the environment, by stopping wasting tons of paper.”
E-invoicing is a hot topic in the EU. As you are active in several countries, could you tell a bit more, from a technical perspective, about the differences between e-invoicing regimes.
“The first model worth mentioning is the centralised exchange model. This is the model adopted by Italy and Poland, where all communications go through a central HUB (SDI in Italy, KSeF in Poland). This model has some advantages, especially for tax authorities, but also some disadvantages. For example, from a technical point of view, a centralised HUB can easily become a bottleneck for communications. In addition, there are some privacy issues to consider: does the tax authority need to know all the information contained in the invoice? Perhaps this information may contain sensitive data.
Another interesting one is the decentralised clearance model (e.g. adopted in Mexico), where the communication is regulated only between parties and the tax authority but the exchange between parties is not regulated. So we find that the tax authority receives structured information while private companies continue to exchange not structured information. This of course inhibits automation and all the advantages that digitisation can bring to companies.
The model I like the best is the one proposed by the Peppol CTC (Continuous Transaction Control) group, where there is a different level of standardisation between private companies and tax authorities.
This model proposes 5 corners (or actors) where corner 1 is the sender and corner 4 is the recipient. Between them there are the Peppol Access Points, corner 2 and corner 3. Up to this point this is standard Peppol. The CTC model adds a 5th corner, which is the tax authority and with which only the Access Points (corner 2 and 3) need to talk by communicating only relevant information.
In this way all the parties can benefit from the revolution: private companies can exchange structured information, while tax authorities receive only what is really needed without it being a real bottleneck.”
Do your clients have difficulties to comply with these types of systems (e.g. Italian SdI)? If so, what do they find the most difficult aspect?
“There are two kinds of complications. The first is technical: talking to tax authorities is not an easy task and requires some solidity to ensure effective communication. This is where products such as A-Cube API can help companies to be in compliance (A/N are one of the co-founders of A-Cube). The second is related to the format to be used to compile an invoice. There are so many borderline cases and so many fields you can use, it can be confusing.”
The Peppol network is currently discussed within several Member States as a means to implement mandatory e-invoicing. Could you tell a bit more about Peppol and what role A-Cube has in it?
“I probably anticipated this response a bit in a previous one. Technically speaking Peppol is a document exchange network: sender and receiver are registered within the network and expose their capabilities (AKA which kind of documents they can manage). Between the sender and the receiver there are the access points, that are those elements of the network that know how to establish a connection between the participants and exchange the documents.
A-Cube has an accreditation into the Peppol network to both act as Access Point (AP) and as SMP (Service Metadata Publisher). A-Cube API Peppol is a product with which companies can integrate document exchange flows into their ERP.”
What do you see as the main downside of Peppol?
“Actually the lack of adoption into mandatory B2B regulations is the major downside, but things are moving faster!”
Do you have any insights why other countries did not adapt Peppol for their mandatory B2B e-Invoicing legislation?
“Probably the lack of a centralised access point for the tax authority into the Peppol network architecture makes the Peppol adoption not easy. But here is where the Peppol CTC model will fill the gap, introducing a solution for the Tax Authority that will act as the 5th corner of the network.”
There are currently discussions about real-time reporting for intra-Community transactions? E-invoicing is also discussed, how could mandatory e-invoicing throughout the EU look like according to you?
“This topic is quite hot in Italy these days: from 1st of July the Italian tax authority requires that, for cross border invoices, companies create e-invoices and send them to SDI. You can imagine how this process can be painful for companies and business consultants. Here too I think that Peppol could play a key role, trying to find a uniform exchange model directly managed by governments.”
What can be the role of the Core Invoice standard EN 16931. Can this lead to full harmonisation or are the national CIUS too different from each other?
“I think that EN 16931 will lead to a good level of harmonisation, good enough to permit easier conversion between formats. I do not foresee governments adopting a unified format, but I foresee easier processes to exchange documents between governments through conversion.”
If you could give the European Commission one piece of advice regarding real-time reporting and e-invoicing, what would it be?
“My advice would be to keep it simple, as much as possible.
I think a unified architecture for handling the document transactions would be an easy win-win for everyone.”
What would you say to people to make them more enthusiastic about e-invoicing?
“The more structured the managed information, the greater the benefits. As an example just think of the possibility you have linking invoicing information with your bank accounts (thanks to the PSD2 regulations). There are huge opportunities for everyone to simplify our lives. Digitisation is coming everywhere. Embrace the revolution.”
We would like to thank Antonino again for his time and for giving his perspective on VAT. The opinions expressed in this article are personal. If you have any questions, suggestions or if you want to be our next interviewee, do not hesitate to contact us via info@summitto.com
[1] A-Cube and summitto recently launched a pilot which shows that summitto’s TX++ could serve as the fifth corner in such a model. Read more about this pilot here: https://blog.summitto.com/posts/summitto_creates_peppol_5_corner_model_pilot/
[2] For more detailed information regarding the obligation to send intra-Community invoices via the SdI see: https://www.informazionefiscale.it/fattura-elettronica-forfettari-2022-obbligatoria