The French government announced in September 2019 that the requirements for mandatory e-invoicing would enforce the use of only electronic invoices for all taxable transactions in France. As scheduled, the mandatory e-invoicing system will take effect between 1 January 2024 and 1 January 2026.
As a result, all business owners must understand these regulations and how to prepare for compliance.
Companies and government institutions across the world today are fast adopting automation technology in all phases of their corporate operations. The e-invoicing mandate in France is one of such advancements.
Notably, introducing the e-invoicing system is part of the government’s effort to tackle tax fraud by seamlessly transmitting all transaction data to its tax authority.
This article will focus on critical points and questions you may have about the requirements for mandatory e-invoices in France.Read also: E-invoicing Regulations Per Country Overview
Is e-invoicing mandatory for all in France?
The mandatory electronic invoicing applies to all companies in France that are subject to VAT.
Although the system kicks off fully on 1st July 2024, it has been effective on all Business to Government transactions since January 2020.
In that time, the government set up an automation solution called Chorus Pro to help public administrations easily comply with the mandate.
Technically, we can classify the recipients of this electronic solution according to their business model and company size.
In the first category, all transactions between business to business (B2B) and foreign operators must comply with electronic e-invoicing requirements in France.
Similarly, small and medium enterprises (SMEs), large companies, and medium-sized companies that process the types of transactions above are also required to start issuing electronic invoices in France.
The penalty for non-compliance with this e-invoicing mandate is $15 per invoice, capped at $15,000 per year.
Who is exempted from the mandatory e-invoice in France?
According to the tax authorities, mandatory e-invoicing in France will not apply to transactions during the importation of goods.
Enterprises are exempted from issuing e-invoice on transactions that cover medical activities, specific banking and financial operations, and training. This exemption is cited under articles 261 to 261 E of the general tax law.
Another special exemption covers foreign companies operating and registered in France. Instead of issuing e-invoice, these companies will use the e-reporting system to report their transactions.
Lastly, all B2C transactions do not require e-invoicing. However, B2C companies are required to record and transmit these transactions through the e-reporting system.
Phases of implementation
The implementation of the mandatory digital invoice in France will be in three phases as follows:
- 1st January 2023 for large companies
- 1st January 2024 for mid-sized companies
- 1st January 2025 for small and medium-sized entities and others
Although the timeframe for implementing this reform is not uniform, businesses are to start preparing accordingly.
To ensure a fast and accurate upgrade of your business to comply with this reform, you can simply use an electronic invoice management tool.
What is the scope of applying for digital invoices in France?
Although there are still ongoing developments concerning implementing this reform, we understand that the French government has adopted the “Y” model.
This model means that implementing e-invoicing reform in France is a shared responsibility between certified-private e-invoicing corporations and public portals like Chorus Pro.
As a result, the “Y” model ensures maximum flexibility for the companies and tax authorities as they transition to e-invoicing. Therefore, the invoice can be processed in more than one format, unlike in a centralized model.
In addition, companies that already have a digital invoice system in place would continue using them. On the other hand, others will have to set up with a private electronic invoicing solution or Chorus Pro.
However, these existing e-invoicing providers will be considered suitable on the condition that:
- Their invoicing is produced in a format that is easily read, extracted, and reported in an acceptable form.
- The invoicing format can be easily transferred to authorized private corporations for a compliance check.
France e-invoicing requirements
In compliance with the mandatory electronic invoicing requirements, French companies are required to:
- Extract and transfer the required invoice data to the tax authorities through Chorus Pro or their private e-invoicing enterprise for processing.
- Compile and send tax reports on all B2C transactions (i.e., transactions with a non-taxable person), including payment data for services to the tax authority.
- Be able to receive invoices in the specified format.
What is the acceptable format for the France e-invoice mandate?
The exact formats acceptable for companies to process their e-invoice are not yet specified. Nevertheless, Frances’ official e-invoicing management solution, Chorus Pro, accepts invoices in UBL format (an advanced version of XML for invoices) or PDF.
However, it is expected that more formats may be allowed when all French companies have complied with this reform.
For instance, if the invoices include visual elements, companies may consider using hybrid invoice management solutions like Factur-X.
Some vital information that would appear on the invoice include:
- SIRET Number: Your company’s unique ID is recorded in France’s Business Directory Identification System or SIRET.
- Transaction type: Your invoice should specify if the transaction is for a good, a service, or a mixed service.
- Complete detail of the address of where the service is to be delivered
- Option for debits
How to send e-invoices in France
French companies can successfully submit e-invoices on all taxable transactions to the Chorus Pro portal in three ways.
- Through the Peppol eDelivery Network
- Through electronic data interchange (EDI)
- Through an application programming interface (API)
Most governments use Peppol (Pan-European Public Procurement OnLine) in Europe to exchange electronic business documents. Through Peppol, European organizations can securely transfer and send e-documents and messages or connect networks seamlessly.
Taxpayers in France are required to select private or public invoicing enterprises that support Peppol integration.
For enterprises with a modest number of invoices, the portal also allows them to create and upload invoices in PDF format.
What are the benefits of e-invoicing in France?
As stated earlier, the government of France introduced the digital invoice system to curb tax evasion fraud. But the system is even of more benefits to both the government and French companies.
- Firstly, introducing electronic invoicing in France would reduce the cost of producing the paper invoice. By doing that, the reform is indirectly promoting a greener and sustainable work environment.
- Similarly, using an electronic invoice solution eliminates the chances of human errors peculiar to manual data entry and the fear of losing invoice data. As a result, companies can quickly resolve invoice disputes with customers and the tax authority by reviewing data generated from stored electronic invoices. For the French government, the electronic invoice mandate sets it on the path to promoting and increasing global tax compliance.
Lastly, the tax authority in France can broaden its scope of operation since the invoice reform is integrated into the e-reporting system. Therefore, they can compile information on B2C transactions that are not subject to tax.
E-invoicing solution in France
Looking for a global compliance solution to assist you as a company or government organization in sending your invoice to the French government?
Storecove has been helping B2B, B2G, and B2C enterprises in many countries with our comprehensive business compliance and invoicing solutions.
You could benefit from the following features:
Multiple invoice formats
The invoicing tool supports over 24 invoice formats. So instead of processing your invoice in different formats, send your invoice to us. We will automatically convert it and send it in an acceptable format to the agency you want.
With Storecove’s invoicing tool, sending your invoice is as simple as sending a regular email. In addition, since we are an accredited Peppol access point, you can rest assured that we will always deliver your invoice.
Receive invoice responses
The integration with Peppol helps with getting feedbacks directly to you in your email box regarding the status of your invoice. The moment it is authorized and paid, a notification will be sent.
Set up your Peppol ID
Getting a Peppol ID is easy because Storecove will create one for you. The tool creates a verified Peppol ID from anywhere globally, including your VAT or Chamber of Commerce Number.
The requirements for mandatory e-invoicing in France will stop tax fraud evasion and increase the country’s ranking among those promoting a green and sustainable environment.
For companies, electronic invoicing ensures efficient management of transaction information, dispute management, and easy retrieval.
Ready for a more straightforward way to send your e-invoice? Get started with our e-invoicing tool here.
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