French Ministerial Conference on E-Invoicing
On February 10, 2022, France hosted a virtual conference on “Electronic invoicing: an instrument for the digital transformation of businesses and government”. This event was a way for the French Presidency of the European Union to start a dialogue around the EU-wide adoption of e-invoicing and the drive towards standardising practices under “VAT in the Digital Age” initiative. It was also an opportunity for the French authorities and businesses leaders to share information and feedback on the upcoming introduction of mandatory e-invoicing in France.
The conference provided a forum for various different tax administrations to share their implementation experience along with examples of best practices in order to help illustrate to what the transition to e-invoicing entails and what businesses and governments need to be successful in embracing this change.
There was an insightful round table discussion between Olivier Dussopt (Minister Delegate for Public Accounts, France) Laura Castelli (Deputy Minister of Economy and Finance of Italy), Vincent Van Peteghem (Deputy Prime Minister and Minister of Finance of Belgium), and Gonzalo Garcia Andrés (Secretary of State for Economic Affairs and Business Support of Spain). Italy introduced mandatory real-time e-invoice issuance and reporting from January 1, 2019, while Spain and France have already legislated for introduction of e-invoicing in 2024. In addition, Belgium has suggested it will also mandate e-invoicing soon.
“The most technical reforms are often the ones that make the biggest difference for our businesses and our growth model. With e-invoicing, we can write into EU law a bold programme aimed at transforming government action and streamlining taxation so that Member States will be better armed to administer and levy taxes, not to mention fight tax evasion”.
Olivier Dussopt, Minister Delegate for Public Accounts
Feedback from conference and some key issues discussed
1. Need to have good clear communication between software providers, tax authorities and other key stakeholders
2. Be aware and careful when considering trusted third party e-invoicing software and solution providers, there is a risk of possible e-invoicing “scams”
3. IT specifications need to be made available in English – and this translation should be undertaken by the tax authority before release
4. Identify needs and find solutions for SMEs who issue and receive fewer invoices and may have more manual processes to produce invoices today
5.Businesses should set up multi-functional teams as invoicing is “the engine of the company” and there is a need to identify and map all types of invoices raised and the current processes.
6. E-invoicing and E-reporting can be a genuine “win/win” deal for businesses and tax administrations. Both parties will see some benefits with the implementation of e-invoicing regimes.
7. Use of E-invoicing and E-reporting system will also allow businesses to reuse data for live monitoring of their activities and to run insightful reports. Tax authorities should also be able to use the data to pre-populate VAT returns.
Compulsory e-invoicing in France
France will introduce a mandatory requirement for businesses to issue e-invoices in a phased approach between July 1, 2024 and January 1, 2026.
|Business size||Mandatory implementation date|
|Large Companies||July 1, 2024|
|Small and Medium-sized Enterprises (SMEs) with workforce of less than 5,000 people and annual sales of less than €1.5 billion or a balance sheet total of less than €2 billion||January 1, 2025|
|SMEs and Very Small Enterprises (VSEs) with fewer than 250 employees and annual sales of less than €50 million or a balance sheet total of less than €43 million||January 1, 2026|
France has stated that its two objectives for the implementation of mandatory e-invoicing are:
1. Simplify the tax environment; and
2. Fight tax evasion so that law-abiding businesses can reap the benefits.
It will be optional to use the “Chorus Pro” platform (currently used for raising invoices to the public sector) which will be scaled to provide the essential functions of e-invoicing for businesses. But beyond these more basic functions for SMEs, it is expected that most businesses will seek to select and implement an e-invoicing software solution.
It is hoped that the use of e-invoicing in France will increase the competitiveness of French companies by accelerating their digital journey resulting in estimated savings of €4.5bn for SMEs. Over time, it is hoped that e-invoicing could pave the way for pre-filled VAT returns as the tax authority will already have transactional level details. It is also hoped that by improving digital tools designed to fight tax evasion, the VAT Gap will be reduced and there will be a fairer competition between firms.
All participants (including software editors, business companies, Tax administration, accounting professionals) aligned to say that despite the timeline which will start in July 2024, there is a need to start as of today to communicate to business companies and start engaging with them to work on the new obligations. It is estimated that around 4 million legal entities in France will need to adopt e-invoicing and select and implement an e-invoicing platform by July 2024.
It was also confirmed at the conference that the final specifications will be released by the French Tax Administration before the end of Q2/2022.
Find out more about Avalara's e-invoicing solutions.
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