Italian to English Bus/Financial Law: Taxation & Customs VAT taxation

Does this translate as "bill itself for VAT"?

Here's the context (a letter by someone, perhaps an Italian accountant, to an Italian woman working for or possibly owning a branch company in Italy, the parent company of which is a foreign company):

"Con riferimento alla questione Iva da lei sollevata, per gli acquisti da soggetti non residenti effettuati da soggetti passivi Iva, l’acquirente italiano deve ***emettere l’autofattura***. Pertanto, l’eventuale identificazione di una stabile organizzazione, che assumerebbe quindi la soggettività Iva nello Stato, comporterebbe l’obbligo di emissione della fattura per tutte le operazioni effettuate nello Stato. Di conseguenza, l’eventuale mancata fatturazione comporterebbe l’applicazione delle sanzioni previste per tale ipotesi."

It's not clear to me how this would work. An Italian company purchasing goods or services from a foreign company would have to apply VAT tax to its purchase? To whom would it pay this tax? Not to the foreign company, since it's not clear they are liable for VAT tax. To the Italian state? Does this mean then that the Italian company has to issue a separate receipt for its every purchase from foreign companies, adding VAT tax to the purchase, and then pay that VAt to the Italian state?

At any rate, the important thing for today is to know how translate this phrase correctly; despite my questions here, you don't have to include a huge explanation of Italian tax law.

Thank you for any contributions!

Peter