Electronic invoicing outside the EU and XML standards

The XML format is the foundation of electronic invoicing in Italy and around the world: although each country adopts specific regulations and systems, e-invoicing is clearly moving toward the adoption of shared technical standards and transmission methods, such as XML format and PEPPOL.

The XML standard in electronic invoices

In Italian electronic invoicing, the use of the XML format (eXtensible Markup Language) is a legal requirement. This standard ensures that every piece of data (VAT number, tax code, amount, VAT rate) is placed exactly where the Exchange System of the Italian Revenue Agency expects to find it.

Beyond the Italian case, the existence of a technical standard for exchanging complex data makes it possible to perform automatic checks without encountering the reading errors that may occur with images or PDF files. XML is therefore also the common language that enables communication between invoicing systems in different countries.

In essence, each country may adopt its own standard for electronic invoices, but thanks to the XML standard, different national systems can rely on a shared technical structure that allows the exchange of messages that can be “translated” into their respective digital languages.

At the international level, however, the regulatory framework is highly diverse — a complexity that mainly affects companies carrying out many transactions with non-EU countries.

Electronic invoicing: the situation in Europe and beyond

In Europe and around the world, each country has adopted its own laws and technical rules regarding electronic invoicing: France, for example, recognizes three formats for e-invoicing (UBL, CII and Factur-X); in Germany there are two (ZUGFeRD and XRechnung). All these standards are, of course, based on XML. 

There is, however, a major difference between the Italian system and those adopted in other countries. Starting from 2019, Italy introduced a centralized and mandatory system requiring all invoices to pass through the Exchange System of the Italian Revenue Agency, which receives the invoice, checks it, and forwards it to the recipient. Poland, Spain, Romania and other EU countries have chosen or are implementing similar models.

Germany, Belgium and France, as well as Switzerland and the Scandinavian countries, have instead opted for decentralized models (which guarantee data interoperability) where invoices circulate directly between operators, following shared transmission methods and standards (such as PEPPOL, Pan-European Public Procurement OnLine), without a general obligation to pass through a single government platform. 

The decentralized model also dominates among the most relevant non-EU countries for Italian companies operating internationally, such as the United Kingdom and the United States. Here too, systems are based on the PEPPOL network and the XML standard, which confirms itself as the globally shared technical foundation for e-invoicing.

Italian rules for non-EU invoicing

Italian legislation requires that all electronic invoices, including those addressed to non-EU customers, be created in XML format and digitally stored for 10 years. Unlike what happens in the domestic market, however, for non-EU customers sending the XML file through the Exchange System is not the only way to deliver the document to the customer, who usually receives the invoice via email in PDF format.

The transmission of the XML file to the SdI nevertheless remains mandatory by law in order to communicate the transaction data to the Italian Revenue Agency (replacing the former cross-border transaction report). In this case, since it is not possible to enter an Italian recipient code, the “Recipient Code” field must be filled with the conventional seven-letter code XXXXXXX.

Why adopt the XML standard for non-EU invoices

As we have seen, Italian law does not require the transmission of the XML file to the customer for non-EU electronic invoices. 

However, using this format to manage the entire document workflow brings significant advantages, and not only in terms of international tax compliance. 

The first advantage is related to the cross-border transaction report: if invoices pass through the SdI, the Italian Revenue Agency can automatically acquire the transaction data, avoiding the need to submit the Cross-Border Transactions Communication.

Furthermore, adopting a structured format such as XML makes it possible to automate internal processes by eliminating manual data entry into management software. It is no coincidence that very large companies often also request the XML invoice file, so that they can integrate it directly into their information systems.