E-invoicing and e-reporting in 2024 in France
E-invoicing and e-reporting obligation in France will be implemented progressively starting in July 2024.
Electronic VAT invoices for B2B transactions and e-reporting of all supplies not falling in the e-invoicing obligation will be progressively introduced in France, following a 3-years calendar plan.
Electronic invoices are already mandatory since January 2020 in France concerning transactions with public administration. However, the implementation on B2B transactions has been postponed from 2023 to July 2024 – we advanced this in a previous article.
What is e-invoicing in France?
E-invoicing means issuing, sending, and receiving your invoices electronically. In France, mandatory e-invoices require all businesses to issue these invoices in a pre-defined format following specific transmission standards. All relevant data in e-invoices issued in France will be communicated to the tax authorities in real-time.
When will e-invoices in France become mandatory?
Authorities plan to introduce B2B electronic VAT invoices in different stages over three years, as follows:
- 1 July 2024: starting with large taxpayers (or “grandes entreprises”); all companies that cannot be categorized under other sizes.
- 1 January 2025: companies of intermediary size; these are not small or medium size, with less than 5,000 employees and whose annual turnover does not exceed EUR 1.5 billion.
- 1 January 2026: small and medium-sized companies with less than 250 employees and an annual turnover of less than EUR 50,000,000.
It is important to note that, despite the progressive implementation calendar, all companies must be able to receive electronic invoices by 1 July 2024.
Large companies must issue e-invoices from 1 July 2024. Also, all companies must be able to receive electronic invoices by 1 July 2024, despite their size.
Following these changes, an estimated €4.5 billion is expected to be gained for SMEs due to the generalization of electronic invoicing.
What transactions are covered by mandatory e-invoicing in France?
All business-to-business, or B2B, taxable transactions made in France are subject to e-invoicing as per the implementation calendar. This is, e-invoicing will be mandatory for all domestic transactions (sales and purchases and supplies of services) made between companies established in France and VAT taxpayers.
Non-taxable transactions for VAT purposes are not under mandatory e-invoicing or e-reporting implementation.
E-invoicing will apply to B2B taxable transactions made between companies established in France and when French invoicing requirements apply.
How will you issue and receive e-invoices?
Electronic invoices will be sent to the business client via a dematerialization platform, whether the public portal or another private electronic platform. Currently, e-invoicing in France concerning transactions with the public administration (B2G) via the Chorus Pro platform.
In their role as an intermediary between the supplier and client, these platforms will have the ability to transform the form of the invoice issued by the supplier into a format suitable for the client.
Invoices received from your suppliers will be sent to you electronically through the selected platform. This platform can be the same as your provider, a different platform, or the public portal because these platforms must be compatible for the exchange.
What are the advantages of e-invoicing?
- Increasing competitiveness between businesses by accelerating digital transitions
- Reducing the cost to businesses of paper invoices.
- Simplifying, in the long term, VAT reporting obligations for businesses by pre-filling returns.
- Speed up the fraud detection process, thus making the VAT reporting process more transparent.
- To create a more precise and more complex picture of economic activity to enable the organization and improvement of economic policy for businesses.
What is E-reporting in France?
E-reporting is the obligation to declare to French tax authorities sales not falling within the scope of French e-invoicing.
French e-invoices will be required for all sales between French businesses. However, exports, imports, sales to private individuals (B2C), intra-Community supplies, or acquisitions would not fall within this category. French authorities confirmed that it will be mandatory to report data of these transactions.
The implementation calendar is the same as for the B2B e-invoicing obligation.
In general, transactions are listed in Article 290 of French VAT Law. This includes sales and supplies of services transactions made with French private customers, e.g., domestic retail sales or customers established abroad – both private customers or companies, e.g., intra-Community supplies and exports.
Also, foreign businesses might be subject to e-reporting obligations when they perform taxable transactions with the place of supply in France.
Foreign businesses might be subject to e-reporting obligations when they perform taxable transactions with the place of supply in France, like domestic supplies to private customers or intra-Community supplies.
Are foreign businesses affected by e-reporting in France?
Foreign businesses are subject to e-reporting obligations when they perform taxable transactions in France, for which they must charge French VAT. You will find below a list of common scenarios on transactions made by foreign companies registered for VAT in France:
- Domestic sales B2B reverse-charge: these correspond to domestic sales B2B made to a company established in France. In this case, the client based in France is subject to the e-reporting obligation and not the foreign company.
- Domestic sales made to other foreign companies: in this case, the supplier non-established in France is subject to the e-reporting obligation.
- Domestic sales B2C: in this case, the supplier non-established in France is subject to the e-reporting obligation.
More information about French electronic invoices
Ordinance No. 2021-1190 of September 15, 2021 on the generalization of electronic invoicing in transactions between taxable persons for value added tax and the transmission of transaction data, sets the grounds for general implementation of the electronic invoicing in France (Ordonnance n° 2021-1190 du 15 septembre 2021 relative à la généralisation de la facturation électronique dans les transactions entre assujettis à la taxe sur la valeur ajoutée et à la transmission des données de transaction).
The ordinance also clarifies the definition of an electronic invoice, clarifying it refers to an invoice issued, transmitted, and received in a dematerialized form and which necessarily includes a minimum base of data in a structured format, differentiating it from "paper" invoices or ordinary PDF.
The French tax authorities publish a FAQ article about this new obligation, updated when necessary. Also, the technique specifications for B2B electronic invoices and e-reporting are published on the authority’s website – you can review them here.
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