Mandatory e-invoicing and e-reporting in France from July 1, 2024

France passed Ordinance No. 2021-1190 on September 15, 2021 and this was published in the French Official Journal on September 16 2021. This legislation confirms the introduction of:

• Mandatory e-invoicing for domestic business-to-business (B2B) transactions
• Mandatory e-reporting of transactional data for cross-border B2B transactions (both sales and purchases), B2C transactions taxable in France and payment data for services.

Business-to-Government (B2G) e-invoicing has already been implemented in France from 2017 and has been mandatory since January 1, 2020. Businesses use the Chorus Pro platform to issue e-invoices to public bodies and Government agencies and 140 million invoices have already been issued through this platform.

French VAT registered and established companies will need to issue e-invoices to business customers in France. The e-invoicing mandate legislation does not currently apply to foreign businesses without an establishment in France. However, please note that some foreign companies not established in France, but VAT registered in France, will be subject to the new e-reporting obligation where their customer is not a business customer (including private individuals). Where supplies of goods or services are specifically exempt from VAT and therefore exempt from tax invoicing, they will also not fall within the scope of e-invoicing and e-reporting, for example certain banking and insurance services, medical and health services, educational services).

E-invoicing and e-reporting will be introduced in a phased approach across three phases depending on the size of the business. However, all companies, regardless of their size will be required to receive invoices in electronic format from July 1, 2024 when their suppliers are required to issue e-invoices. The first wave of companies that need to comply will be large companies by July 1, 2024, followed by SMEs by January 1, 2025 and smaller SMEs/VSEs by January 1, 2026.

The French Government’s main objectives of introducing e-invoicing and e-reporting are:

• simplifying doing business in France and strengthening the competitiveness of French companies – with the switch to e-invoicing delivering an estimated saving of at least €4.5 billion
• simplifying VAT reporting obligations through the pre-completion of VAT returns using the data received by the French Tax Authority
• improving fraud detection. France’s VAT Gap in 2019 was estimated to be EUR 13.9 billion, representing 7.4% of VAT not being collected
• improving real-time knowledge of business activities of companies.

“E-invoicing” refers to the issuing, transmission and receipt of e-invoices in a mandated format and including a minimum base of data in structured form. French companies will be required to issue e-invoices to other French business customers.

"E-reporting" refers to the transmission to the French tax administration of certain mandated data relating to transactions that are not covered by the e-invoicing mandate. Therefore, notwithstanding that there is no requirement for French companies to physically issue e-invoices to private consumers (B2C) or to customers based outside of France (including exports and intra-Community supplies), the transactional data must be submitted to the French tax administration. E-reporting will therefore complement e-invoicing and allow for the French tax administration to eventually pre-complete VAT returns for French taxpayers. Imports of goods are not covered by e-reporting and this is because all Import VAT will now be reported through the VAT return (with automatic pre-filing in the VAT return based on import data  communicated by importers through the customs declaration).

To assist the French Tax Administration with pre-filling VAT returns and determining the VAT collected, payment information for invoices or sales where the tax point date is on payment must be also reported by the supplier under the e-reporting mandate, unless the supplier has been authorised to pay the VAT accounted for on an accrual basis under “régime des debits", or the customer is liable to account for VAT under the reverse charge mechanism. We are awaiting further detail on the payment data that is required but this will likely include:

• Date of payment collection
• Amount collected including VAT (broken down by VAT rate if applicable).

Businesses can either send e-invoices via an approved third-party commercial partner platform (known as a partner dematerialisation platform or PDP) or via the public invoicing portal (the “Portail Public de Facturation” or PPF). Businesses will no longer send invoices direct to customers, instead the partner platform or public invoicing portal will send the e-invoice to the customer’s platform.  The choice of platform to receive the e-invoice from suppliers (vendors) is up to the business, it can be the same as the supplier, a different commercial platform or through the public billing portal. However, the French Government has recently announced that PPF will only have basic core functionality and that this will likely only be used by the very smallest companies in France. In addition, e-reporting can be done directly via PPF or via any platform – again this is the choice of the business. PPF also allows the receipt and processing of e-invoices from foreign suppliers (thanks to its connection to PEPPOL) and provides basic legal archiving of the e-invoices processed via the platform.

A partner dematerialisation platform will be operated by an approved service provider who will act as an intermediary and have two key roles:

• Responsible for transmitting the e-invoice from the supplier to the customer
• Extract certain data from the e-invoices and transmit this to the French tax administration. 

As the supplier will not be able to impose an e-invoice format on the customer, the partner platform may also convert the format of the e-invoice into a format requested by the customer. However, this must be done in a way that ensures the authenticity, legibility and integrity of the invoice data.

Initially, 24 mandatory items (data or blocks of data) must be sent to the French tax administration. These include:

• Unique identification number (SIREN) (for both supplier and customer)
• Intra-community VAT number (for both supplier and customer)
• Intra-community VAT number of supplier’s tax representative (if applicable)
• Supplier’s and customer’s Country
• Category of supply e.g. goods or services
• Invoice issue date
• Unique invoice number
• Number of the rectified invoice in the event of the issuance of a corrective invoice
• Option for tax payment based on debits
• Total exclusive of VAT by VAT rate
• Amount of corresponding VAT by VAT rate
• Applicable VAT rate
• Total amount to be paid exclusive of VAT
• Amount of VAT payable
• In case of exemption, the reference to the legal provision
• Invoice currency code/designation
• Mention "self-billing (if applicable)
• Reference to a special scheme (if applicable)
• Mention “Reverse charge” (if applicable)
• Date of delivery of the goods or performance date of the service
• Date of the deposit paid if it is different from the date of issue of the invoice. 

Additional items will eventually be added at a later stage:

• Price markdown (discounts and rebates)
• Detailed description of goods delivered or services rendered
• Quantity of goods delivered or services rendered
• Price exclusive of tax for each good delivered or service rendered
• Delivery address / address of performance of service, if different from customer’s address (at least country)
• Date of issue of the rectified invoice in the event of issue of an amending invoice
• Eco contribution amount.

In relation to international B2B transactions (cross-border goods and services to and from businesses outside of France), the data to be transmitted will be identical in format and content to that required under e-invoicing (but excluding the unique identification number of the foreign business as they won’t have a SIREN number).

In France there will be multiple acceptable formats for e-invoices. All partner platforms will offer a minimum number of common formats to guarantee the interoperability. The invoice can be created in structured or mixed format, in one of the 3 base formats compatible with the EN16931 standard (this is the EU’s e-invoicing standard):

• UBL
• CII
• Factur-X

In addition, a PDF invoice can be created (however please note that this still needs to meet strict technical requirements and businesses can’t simply scan paper invoices). Factur-X is a hybrid document that combines both a human readable PDF with machine readable XML language. This standard has been developed through cooperation between France’s National Forum for Electronic Invoices and Electronic Public Contracts (FNFE-MPE) and Germany’s Forum elektronische Rechnung Deutschland (FeRD).

Avalara has an e-invoicing solution that can help companies stay compliant in over 60 countries including France. Contact an expert at Avalara to discuss how we can assist with the upcoming e-invoicing mandate in France.