France | e-invoicing | e-reporting
2 mins | September 28, 2022

E-Reporting or E-Invoicing in France, what’s the deal?

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...

E-Reporting or E-Invoicing in France, what’s the deal?

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. 

An overview of e-invoicing and e-reporting

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 mandatory e-invoice timeline

The three-year plan will roll out according to the size of the business, as follows:

  • Large Enterprises or large taxpayers that do not classify under any other sizes (1 July 2024)
  • Small and medium-sized enterprises (SMEs) with less than 5000 employees and an annual turnover that does not exceed € 1.5 million (1 January 2025) 
  • Small and medium enterprises (SMEs) with less than 250 employees and an annual turnover that does not exceed € 50 000 (1 January 2026)  

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. 

E-invoice format and compliance

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.  

Who is affected by e-reporting in France? 

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.

The benefits of e-invoicing

Although e-invoicing is gradually enforced in numerous countries, it’s important that businesses also acknowledge the numerous benefits that come with this change. 

  • E-invoicing minimises the cost of business expenditure to print physical invoices.
  • Limits fraud and ensures transparency of transactions.
  • It creates an accurate trail of each transaction, which is easier for filing purposes and identifying accurate VAT refund amounts.
  • Assists businesses in their economic activity by showcasing the inputs and demands of the business trends.

VAT IT and e-invoicing compliance

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.

Get in touch and we’ll complete a FREE VAT scope analysis for your business.

 

 

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