Economy, new frontiers of digital innovation.

Intro.

Digital innovation is propelling companies and citizens towards a new social and economic paradigm, in which we are witnessing a drastic change in consumption and work patterns. It is a full-fledged revolution that is accelerating its implementation due to the Covid-19 health emergency.

Did we have to wait for a pandemic to understand the need to adapt consumption and work to the new technologies already developed in society, such as digital? Unfortunately, social revolutions always occur in conjunction with social or even economic crises, so it is advisable to hope for a rapid change towards the new frontiers of technology and digital.

Like every social and economic transformation, a period of adjustment is necessary because we are facing a cultural upheaval, which involves people in a complete and appropriate knowledge manner. Let’s take a brief historical excursus to understand how long digital technology had been ready without having a concrete implementation both in companies and public bodies to speed up production processes and work organization.

Digital era.

It began to emerge in the economy of companies in 2009 with one goal: to eliminate paper management in communications and documents with legal value through the “Anti-crisis” decree law (Legislative Decree 185/2008, converted by law 2/2009).

As for the regulations on books and records, the Digital Administration Code already provided for the possibility of keeping these documents in electronic format.

The Ministry of Economy and Finance had issued a decree indicating how the stamp duty payment for those documents in electronic format still subject to this obligation should be fulfilled.

Although some doubts remained about the timing of payment of this tax, which remains postponed for paper keeping but is anticipated in the case of electronic keeping, this had not prevented many companies from choosing for some time the computer training of documents such as the journal, the inventory book, and all other writings not subject to mandatory preventive certification, with obvious and significant savings of time, personnel and material resources.

However, the hurdle of books for which certification is mandatory still remained. If many of the characteristics of a paper book can be easily transferred to an electronic document, there is an objective impossibility of “certifying” an electronic document which, clearly, at the time of certification, does not yet exist.

Digital and accounting books.

A book composed of blank pages can certainly be certified, while it is complicated to certify an electronic document in which a text has not yet been recorded.

The new law solves this problem: it provides that the certification obligations of books formed in electronic mode will be fulfilled by the quarterly application of digital signature and timestamp on the document. It is clear that both operations can only be carried out after the movements have been recorded in the book.

With the digital signature, it is guaranteed that the content of the document can no longer be altered, while with the timestamp, the date and time at which the operation took place are ensured. In this way, the content reported in the book, containing the registrations of the previous three months, is rendered unalterable, or in case of any alteration, the verification of the digital signature will report this fact.

The company will be required to electronically record data, to keep books without printing them, and without creating real paper towers. All this without reducing, but rather significantly increasing, the levels of security of data and documents.

It should be noted that the new civil provisions expressly refer to the rule that attests to the probative value of books kept in electronic format: “The books have probative effect as per articles 2709 and 2710 of the Civil Code,” removing any doubt in the case of disputes between entrepreneurs.

Digital IT Solutions.

Information technology helps companies with surprising and futuristic technological solutions that can produce excellent results in the shortest possible time, with a reduced margin of error.

Company data passes through a management system where it is processed. Only later will the necessary information be provided. The computerization of company procedures is not only encouraged by the administrator’s needs but sometimes also by regulatory acts, such as the decree of the Ministry of Economy and Finance of January 23, 2004.

This measure provides a unified regulation for the computer procedure relating to the issuance, storage, and display of documents relevant for tax purposes. As early as 1994, a legislative decree, no. 357, provided that the keeping of accounting records with mechanical systems could be considered regular, in place of transcription on paper media when, even during inspections or controls (pursuant to article 52 of DPR 633 of 1972), they were updated on magnetic media and could be simultaneously printed on request by the competent authorities and in their presence at the place where the records were kept.

The Civil Code also intervenes in the matter of document preservation. Article 2220 (accounting records and social books) provides that the records must be kept for a period of ten years from the last registration.

The same applies to invoices and similar documents, received and sent letters and telegrams, books, registers, and every document relevant for tax purposes (and therefore, the journal, inventory book, shareholder book, book of obligations, auxiliary records in which asset and income elements must be recorded, auxiliary warehouse records, register of depreciable assets, balance sheet, VAT registers, tax returns, F23 and F24 payment forms). The article also specifies that records and documents can be kept in the form of recordings on image media using the so-called paperless methodology.

It should be noted that the accounting document can represent two types of documents: the computer document for which the mode of issuance, storage, and display is provided and the analog document issued according to the traditional method but for which it is possible, as an alternative to paper storage, to provide electronic storage. The computer document is considered the computer representation of legally relevant acts, facts, or data.

These documents, to be relevant for tax purposes, must be static and unmodifiable and therefore unalterable during the access and storage phases. For this reason, there should be no source code or instructions capable of modifying the facts, acts, or data represented therein.

Some text editors or spreadsheets allow the creation, storage, and subsequent use of so-called macros and functions that update data every time an event occurs.

As is known, a macro is an algorithm written or recorded in which a command or series of commands necessary to automate often complex or repetitive activities is stored. Functions, on the other hand, are predefined formulas that perform calculations using specific values in a syntax.

Every computer document must necessarily present a temporal reference, that is, information that associates the document with the date and time. It must also be signed with an electronic signature, a particular type of qualified signature based on an asymmetric key system – public and private – which allows the holder to make the origin and integrity of a computer document evident and verifiable.

All individuals can have a digital signature by turning to accredited certifiers, subjects who have obtained authorization to carry out this activity (the list of subjects is online on the website of the CNIPA, the National Center for Information Technology in Public Administration).

The tool used for applying a digital signature is generally a smart card. The holder is issued a qualified certificate, an electronic certificate that allows for the verification of their identity and contains identifying data of the entity that issued it and the signature holder, as well as the terms of validity of the certificate itself.

As previously mentioned, an analog document is issued through traditional methods, but it is possible to provide electronic preservation through storage on digital media. This is done through an optical scanner. Storage can occur on any digital medium as long as the readability over time, searchability, and information extraction are guaranteed.

Today, the most commonly used storage media are CD-ROMs, DVDs, and DAT, magnetic tape cartridges that are typically used for backup activities. An important detail is the need to store documents in a strict chronological order.

The most frequently used format for document storage is the Portable Document Format, or PDF, from Adobe Systems.

The entire process of document storage and preservation must be supervised by a public official, such as a notary, clerk, municipal secretary, or other official appointed by the mayor, who attests to its conformity.

Only after the process of storage and preservation is complete can the paper document be destroyed, but not before applying the digital signature and the timestamp: an electronic evidence that allows for the temporal reference to be opposable to third parties, which, in turn, contains date and time information.

If the formal irregularities committed during the preservation of electronic documents are such that they render them unreliable, the tax administration, under Article 39, paragraph 2, letter d) of Legislative Decree No. 600 of 1973, will proceed with inductive assessment.

Similarly, inductive assessment will be carried out when the inspection report shows that the taxpayer has not preserved, refused to present, or has in any case removed from inspection, completely or for a significant part, the issued invoices or when the formal irregularities of the registers and other accounting documents resulting from the inspection report are so serious, numerous, and repeated as to render the accounting unreliable.

Finally, it is necessary to communicate, via electronic means, to the Revenue Agency, within the month following the deadline for the submission of income tax, Irap and VAT declarations, the imprint of the electronic archive, the electronic signature, and the timestamp.