As of 1 July 2024, France will introduce mandatory e-invoicing. According to the new mandate, this will be a step-by-step process until 2026. However, to stay ahead of the compliance curve, it’s essential to understand the basics before it’s too...
As of 1 July 2024, France will introduce mandatory e-invoicing. According to the new mandate, this will be a step-by-step process until 2026. However, to stay ahead of the compliance curve, it’s essential to understand the basics before it’s too late.
Mandatory Electronic Invoices (e-invoices) have been compulsory for transactions concerning public administration since January 2020. However, mandatory e-invoicing on B2B transactions has not yet been implemented and has been postponed from 2023 to July 2024.
This means that companies based in France will be required to issue e-invoices to other French business customers. To fully understand and comply with the upcoming mandate, we must take a look at the core differences between e-invoicing and e-reporting.
E-Invoicing: The requirements of e-invoicing aren’t limited to going digital. Although it’s all done electronically, there is an additional mandated format. This format requires a minimum database and structure that businesses need to include. Furthermore, this data is shared with the French Authorities in real-time to ensure complete transparency.
E-Reporting: E-reporting is the responsibility to report to French Authorities any sales that do not fall within the e-invoicing rules. While e-invoices are mandatory for sales between French businesses, E-reporting is for all imports, exports, sales to private individuals (B2C), or Intra-Community supplies (B2B).
The three-year plan will roll out according to the size of the business, as follows:
Within the process, the mandate also includes specific transactions that will require e-invoicing. All B2B transactions made in France and that are taxable will require reporting via an e-invoice format. In addition, e-invoicing is also mandatory for domestic transactions between companies established in France and registered VAT taxpayers.
For electronic invoices to be fully compliant, they need to follow a specific format. This will impact your VAT recovery from a Domestic front. The technicality of the invoices is imperative. It serves no purpose if you have an “electronic invoice”, but the invoice does not meet the required standard.
Foreign businesses are subject to e-reporting obligations when a taxable transaction occurs. This is because French VAT has been charged and may be refundable. This includes a few common circumstances for foreign companies registered for VAT such as:
B2B domestic sales between businesses established in France.
Domestic sales to foreign companies. If the supplier is not based in France, they are obliged to do e-reporting.
Domestic sales made to customers (B2C). The supplier who is not based in France also has an e-reporting obligation.
For more on how e-reporting can affect your business in France, download the France VAT guide here.
Although e-invoicing is gradually enforced in numerous countries, it’s important that businesses also acknowledge the numerous benefits that come with this change.
For more information on your e-invoices and e-reporting, an FAQ published by the French Tax Authority elaborates on the mandate. Alternatively, you can partner up with industry experts to ensure that your VAT recovery is convenient, cost-effective and 100% compliant.
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