E-invoicing mandates are typically perceived as having a direct correlation with the reduction of the VAT gap, which represents the projected amount generated by VAT revenues (usually expressed as VTTL- VAT Tax Total Liability), compared to the actual amount collected by governments. Ultimately, evaluation of the tax gap can validate these claims.

In Italy, specifically, Istat data has confirmed that the purported success with e-invoicing mandates is working. Italy had earlier pledged to reduce tax evasion by up to 15.8%, and the figures confirm that their initiatives to reduce the tax gap are working.

Italy’s success in reducing the VAT gap has allowed the next step in EU Covid recovery funding and supports the claim that the e-invoicing and e-reporting mandate currently operational in the country is an effective mechanism to reduce the VAT gap.