Italian SdI Invoicing for Cloud Services: PEC, Recipient Codes, Tax Categories
Buying a cloud SMTP service from a foreign provider creates an SdI headache for Italian customers. Here is how it works, what to ask for and how Italian-resident providers simplify it.
Italy's Sistema di Interscambio (SdI) is the mandatory electronic invoicing system for all B2B transactions. Suppliers issue an XML invoice, the SdI validates it, and the customer's accounting system imports it. The system has been in place since 2019 and is generally praised by accountants — when it works. When a foreign supplier is involved it can become a multi-week reconciliation problem.
Cloud services — SMTP, hosting, SaaS — are particularly affected because they are often invoiced monthly, in small amounts, from suppliers in Ireland, the US or Eastern Europe. This article explains how SdI works for cloud services, what to ask suppliers, and how to set up your accounting workflow so a Stripe-invoiced supplier in California does not block your year-end close.
How SdI Works
The flow for a domestic Italian B2B invoice:
- Supplier generates the invoice as XML (FatturaPA format).
- Supplier sends it to SdI (Agenzia delle Entrate).
- SdI validates structure and content.
- SdI routes it to the customer based on Codice Destinatario or PEC.
- Customer's accounting software imports it.
If everything is set up correctly, the supplier knows the customer is Italian and routes via SdI. If not, the supplier issues a paper or PDF invoice and the customer has to manually import it as a self-invoice (autofattura) for VAT purposes.
Codice Destinatario and PEC
Italian businesses identify themselves to SdI through one of two channels:
- Codice Destinatario: a 7-character alphanumeric code assigned by the accounting software (e.g.
2R4GTO8). The supplier puts this in the XML and SdI delivers directly to the software. - PEC: certified email address. SdI delivers the XML as a PEC message. The accounting software polls the PEC and imports.
The default placeholder code 0000000 tells SdI "no specific destination", and the invoice waits for the customer to fetch it manually from the Agenzia delle Entrate portal — which most customers never do.
⚠️ Warning: If a supplier uses 0000000 as your code, you have an invoice in the SdI portal that your accounting software does not know about. This is the single most common source of missed supplier invoices.The Foreign Supplier Problem
Non-Italian suppliers usually have no idea about SdI. They issue a PDF invoice through their billing system (Stripe Billing, Chargebee, Recurly), and the Italian customer must:
- Receive the PDF.
- Generate an autofattura (a self-invoice using TD17/TD18/TD19 codes depending on the nature of the transaction).
- Send the autofattura through SdI to themselves.
- Reconcile both documents in accounting.
This is doable but tedious. For 12 monthly invoices a year, you spend an hour each in your accountant's office that you would not spend with an Italian supplier.
What to Ask Suppliers
If you are buying a cloud SMTP service (or any cloud service) as an Italian business, ask:
- Do you issue SdI-compliant XML invoices?
- What is your VAT registration in Italy (P.IVA) or in the EU (OSS / IOSS)?
- Can you record our Codice Destinatario or PEC at signup?
- What tax code (TD01, TD17 etc.) appears on the invoice?
If the supplier cannot answer, you will likely need to issue autofatture monthly. Plan accordingly with your accountant.
The Tax Code Maze
The TD codes on FatturaPA matter for VAT treatment. The relevant ones for cloud services:
| Code | Use | VAT implication |
|---|---|---|
| TD01 | Standard invoice (Italian supplier) | VAT charged |
| TD17 | Reverse charge on services from EU supplier | Autofattura with reverse VAT |
| TD18 | Intra-EU goods (rare for cloud) | Reverse VAT |
| TD19 | Services from outside EU | Autofattura with VAT applied |
For an Italian SaaS customer buying SMTP from a US supplier, the right code is usually TD19. For an Italian SaaS customer buying from a German supplier, TD17. For an Italian-resident supplier, TD01 (the supplier issues, no autofattura needed).
Cumulative-Cost Considerations
A typical monthly cloud SMTP bill might be €60. The accountant cost to process an autofattura is typically €15-30. So 12 autofatture across the year cost the customer €180-360 in accounting time, on top of the €720 actual service cost. The "saving" of picking a 10% cheaper foreign provider often disappears in accounting overhead.
The Italian-Resident Advantage
An Italian-resident supplier with proper P.IVA invoices you in TD01, the invoice flows through SdI to your Codice Destinatario, and your accountant imports it in seconds. The administrative overhead is zero.
This is why many Italian businesses prefer Italian or Italian-resident suppliers for recurring services, even at slightly higher prices. The accountant's time is real money.
Stripe Tax and Similar
Some non-Italian suppliers use Stripe Tax or Avalara to issue compliant invoices. These tools generally produce a PDF that looks Italian but is not an SdI XML. They are a step in the right direction but not full SdI compliance.
A few suppliers do issue actual SdI XML — typically the ones with a real European presence and an Italian accountant. Ask for a sample XML before signing up if you need automation.
Real-World Patterns
Pattern 1: All Italian suppliers
Simple. SdI handles everything. Accountant happy.
Pattern 2: One foreign supplier (Stripe, Google Workspace)
One autofattura per month. Manageable if you have a routine.
Pattern 3: Many foreign suppliers (Stripe + GCP + Slack + Loom + etc.)
Pain. Consider consolidating to fewer suppliers or pushing key suppliers to issue SdI XML.
The 2025 Update
SdI became mandatory for very small businesses (flat-rate scheme) in January 2024. The threshold previously protecting micro-businesses no longer applies. Every business that issues invoices, regardless of size, must use SdI for domestic B2B.
The EU is also working on ViDA (VAT in the Digital Age), which will eventually harmonise e-invoicing across the EU. Italian businesses are already further along than most EU peers.
How Target SMTP Handles It
Target SMTP is Italian-resident, P.IVA registered, and issues SdI XML invoices via TD01 to every Italian customer. Codice Destinatario and PEC are captured at signup and recorded on every invoice. No autofatture, no manual reconciliation. The Send-Time Firewall obviously has nothing to do with invoicing — but reducing the administrative load on Italian customers is one of the small reasons we operate from Italy.
Closing
SdI is not optional for Italian B2B. Foreign cloud suppliers create accounting friction that the headline price often does not reflect. When evaluating cloud services as an Italian business, ask about SdI compliance early. The right answer is "we issue TD01 XML through SdI"; the workable answer is "we issue a PDF with TD19 information for your autofattura". Anything else means manual reconciliation forever.