Set Up Split Payment
Split payment (Italian: “scissione dei pagamenti”) is a tax mechanism that applies when invoicing the Italian Public Administration. This guide shows you how to enable it on your invoice in a few simple steps.
What is Split Payment?
When you issue an invoice to a public entity (Municipality, Health Authority, Ministry, School, etc.), you would normally receive the amount including VAT and then pay the VAT to the State.
With split payment instead:
| Aspect | What happens |
|---|---|
| You receive | Only the taxable amount (without VAT) |
| The VAT | Is paid directly by the public entity to the State |
Practical example
Invoice of €1,000 + 22% VAT (€220):
- Without split payment: You receive €1,220, then pay €220 VAT
- With split payment: You receive only €1,000, the PA pays the VAT
When to Use Split Payment
You must enable split payment when invoicing:
- Ministries and central administrations
- Regions, Provinces, Municipalities
- Public health authorities and hospitals
- State universities
- Public economic entities
- Companies controlled by the PA
If you’re a flat-rate taxpayer: You don’t need to use split payment because your invoices are VAT-exempt. This option doesn’t apply to your case.
How to Set Split Payment in FatturaSmart
Step 1: Open the Invoice
Create a new invoice or open a draft invoice you’re working on.
Step 2: Access Document Data Settings
- On the invoice screen, find the Document data section (in the central part of the page)
- Click the Edit button (pencil icon) next to the document data
A panel with document settings will open.
Step 3: Select Split Payment
- Find the VAT eligibility field (Esigibilità IVA)
- Click on the dropdown menu
- Select Split payment (Scissione dei pagamenti)
The available options are:
| Option | When to use it |
|---|---|
| Immediate (Immediata) | Standard invoices between private parties |
| Deferred (Differita) | VAT with deferred eligibility (specific cases) |
| Split payment (Scissione dei pagamenti) | Invoices to Public Administration |
Step 4: Confirm Changes
Click Save or Confirm to apply the setting.
What Happens Next
When you enable split payment:
- Visual indicator: The document data card will show a “Split payment” indicator with a dedicated icon
- Amount calculation: The system shows the calculated VAT, but remember you won’t receive it
- Amount to collect: The invoice total includes VAT for correct issuance, but you’ll only receive the taxable amount
Note: The split payment setting is independent from the “Public Administration” checkbox in client data. You can enable it for invoices to private entities if required (rare cases).
Check Before Sending
Before sending the invoice to SDI, verify:
- VAT eligibility set to “Split payment”
- Recipient Code correct (6 characters for PA)
- CIG/CUP entered if required by the entity
- Taxable amount matching the agreement
Frequently Asked Questions
Can I change VAT eligibility after sending the invoice?
No. Once sent to SDI, the invoice cannot be modified. If you made a mistake, you’ll need to issue a credit note and create a new correct invoice.
Does split payment reduce my taxes?
No. The VAT is still paid, just directly by the PA. You receive less upfront but don’t have to pay that VAT later. The tax result is the same.
The entity didn’t tell me whether to use split payment. What should I do?
Most public entities fall under the split payment regime. If in doubt, ask for confirmation from the office that commissioned the work or consult your accountant.
I accidentally selected split payment on an invoice to a private party. Is it serious?
If the invoice has already been sent and accepted, it could create accounting issues. Contact your accountant to assess whether a credit note is needed.
Quick Summary
- Open the invoice
- Click Edit on document data
- Select “Split payment” in the VAT eligibility field
- Save the changes
- Send to SDI
Need Help?
If you have questions about when to apply split payment, contact us:
- WhatsApp: Click the icon at the bottom right
- Email: support@fatturasmart.com
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