AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
When an Italian business buys a service from a Nigerian supplier that is taxable in Italy, the supplier charges no IVA and the Italian buyer self-assesses it by issuing a TD17 self-invoice through the Sistema di Interscambio. For a business with fully taxable sales the IVA due and deducted usually cancel out.
Who pays the IVA when the supplier is in Nigeria
A Nigerian company that sells a service to an Italian business does not register for Italian VAT and does not add IVA to its invoice. Yet Italian IVA can still be due on that service. The mechanism that bridges the gap is self-assessment, often called reverse charge (inversione contabile): the Italian business customer accounts for the tax itself, as if it were both supplier and customer, by issuing a self-invoice and reporting it through the Sistema di Interscambio.
For services bought from a supplier not established in Italy, the document is a TD17. EC News's guide to the post-2022 rules describes TD17 as the integration or self-invoice for services purchased from abroad, with the taxable amount and the VAT shown in the line details, or a Natura code where the operation is not taxable.
Is the service taxable in Italy at all?
Self-assessment only arises when the service is taxable in Italy. That question is answered by the territoriality rules in articles 7 to 7-octies of DPR 633/1972. For the services Italian businesses most often buy from Nigeria, such as software development, design, consultancy, content production, data work or customer support delivered remotely to the Italian company, your commercialista will usually treat Italy as the place where the service is taxed because the business customer is established here. Some categories follow different rules, for example services connected with land, which are taxed where the property is.
Where the service is not territorially relevant in Italy, there is no Italian IVA to self-assess. EC News notes that such purchases of up to €5,000 per operation are also excluded from the SdI reporting obligation; hotel stays and passenger transport abroad are the examples given. A business trip to Abuja usually falls on this side of the line.
How the self-assessment works in practice
- Receive the Nigerian invoice without IVA. Check it describes the service, the dates and the amount, and names your company correctly.
- Create a TD17 with the Nigerian supplier as the supplier and your company as the customer. Convert any naira or dollar amount to euro and keep the rate.
- Show the taxable amount and calculate the IVA at the rate that applies to that service.
- Send it through the SdI by the fifteenth day of the month after the month you received the invoice.
- Record it in the way your commercialista directs, so the IVA appears as tax due and, where the purchase relates to taxable activity, as deductible input tax.
For a business that makes fully taxable sales, the IVA it charges itself and the IVA it deducts commonly cancel out, so the self-assessment costs nothing in cash. For businesses with exempt activity, such as some financial, medical or education services, deduction may be partial and the IVA becomes a real cost. That is a reason to ask your adviser before agreeing a price with a Nigerian supplier.
Worked example
Example only, using an illustrative rate. A Turin start-up buys €3,000 of data-labelling services from an Ibadan company. Its commercialista confirms the service is taxable in Italy. Assuming, for illustration, IVA at 22%:
- Taxable amount on the TD17: €3,000
- IVA self-assessed: €660
- IVA deducted (fully taxable business): €660
- Net IVA cash effect: €0; the start-up pays the Ibadan company €3,000
If the start-up could deduct only half its input IVA, the cost would rise by €330. Check the actual rate for the service with your adviser.
What happens on the Nigerian side
The Nigerian supplier has its own VAT question. PwC's Nigeria summary (reviewed May 2026) says exported services are zero-rated for Nigerian VAT, with input VAT recoverable. So the supplier should not add 7.5% Nigerian VAT to an invoice for services exported to Italy. If a Nigerian invoice shows Nigerian VAT on such a service, ask the supplier to explain before you pay, because you cannot recover Nigerian VAT through your Italian return.
A separate issue is Nigerian withholding tax, which arises when a Nigerian payer pays a foreign company, not when an Italian company pays a Nigerian one. It is covered in Nigerian withholding tax on payments to an Italian company.
Where Pryme fits
Pryme does not prepare Italian VAT returns. For the payment itself, a Pryme Business Account can pay the Nigerian supplier in naira or euro, and Swap shows the rate and fee before you approve, giving you the dated conversion for the TD17. The Finance agent can list unpaid and unintegrated foreign invoices for your accountant to review. The fields of the TD17 itself are covered in recording a Nigerian supplier invoice in Italian e-invoicing.
What to check first
- Is the service taxable in Italy under the territoriality rules?
- Has the Nigerian invoice been issued without Nigerian VAT for an exported service?
- Can your business deduct input IVA in full, in part or not at all?
- Has the TD17 been sent by the fifteenth of the following month?
Questions people ask
Do I pay Italian VAT on services from a Nigerian freelancer?
If you are a business and the service is taxable in Italy, you self-assess the IVA by issuing a TD17 through the SdI; the Nigerian freelancer does not charge it.
Does reverse charge cost my business money?
For a business with fully taxable sales, the IVA due and the IVA deducted usually cancel out. Businesses with exempt activity may only deduct part, so it can become a cost.
Should a Nigerian supplier charge Nigerian VAT on services to Italy?
PwC's Nigeria summary says exported services are zero-rated, so Nigerian VAT should not normally appear on such an invoice.
Is a hotel in Lagos subject to reverse charge?
Generally no: accommodation abroad is not territorially relevant for Italian VAT, and EC News notes such purchases up to €5,000 are excluded from SdI reporting.
Sources
- Gli acquisti da non residenti nel nuovo esterometro (EC News, 28 Jun 2022) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria, corporate other taxes (reviewed 29 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.