Electronic invoicing and transmission of transactions data to the tax authorities

France is preparing for a major reform that will require all companies to exchange their invoices electronically (e-invoicing) and to transmit to the authorities the tax data of their transactions (e-reporting) falling within the scope of VAT as well as payment data when the associated VAT is due upon receipt of payment.

Check out our infographics to understand the basics of the reform.

The legislative framework for this e-invoicing reform is defined in an Amending Finance Act (Act No. 2022-1157 of 16 August 2022, Art. 26). The technical and practical aspects of the reform’s implementation – already largely covered by the government’s and , the latest version of which is dated 31 July 2023 – are detailed in Decree No. 2022-1299 and a ministerial order of 7 October 2022 associated appendices external specifications.

Although certain questions remain unanswered, companies can now operate within a clearly defined legal framework, with the essential technical information available to prepare for this important reform apply.

The reform was initially slated to enter into effect as from 1 July 2024 but the finance bill for 2024 (article 91) pushes this date back to 1st September 2026 but issuing e-invoicing will become compulsory as from 1^st September 2027 for small (SMEs) and very small (VSEs) business. 

This postponement should give businesses, regardless their size, time to make the significant adjustments to their information systems as required by the reform and choose whether to use or not a provider’s services to meet new obligations related to electronic invoicing and reporting, and, potentially, signing up to take part in the test phase (which may now be extended in light of the deferred entry into effect).

All businesses must be capable of receiving electronic invoices as from the reform’s entry into effect (i.e. as from 1 September 2026). However the obligation to issue electronic invoices and report transactions and payment data, will kick in progressively: from 1st September 2026 for large enterprises and mid-caps, but not until 1st September 2027 for SMEs and VSEs.

The main aims of the reform are to address VAT fraud, simplify businesses’ life and reduce the financial burden of processing invoices. Further down the road (it is not yet clear exactly when), the authorities also hope to roll out pre-filled VAT returns. According to the tax authorities, the new rules could also make it easier for businesses to get paid on time.

Click here to find out more about this reform.

The reform’s final details are about to be settled by the authorities.

In addition to deferring entry into effect, they might also tweak one or two further points.

There is no reason to assume the deferral will delay publication of the list of registered private platforms (PDPs), however. This list, specifying the services each plateform will offer, will help businesses decide whether or not they need the assistance of such a provider and, if so, which one to go with.

Likewise, the public invoicing portal (PPF) should be operational ahead of time, logically resulting in a longer test phase with willing businesses.

The French tax authorities have indicated that they will publish guidelines on the reform in the spring of 2024.

Our support

The scope of this reform requires preparation for the changes to be considered in the information systems, while taking into account the specific characteristics of each company: applications used for the issuance of invoices and incorporation of new mandatory statements on invoices, procedures and formats for issuing, transmitting and receiving invoices, cash register software, collection of data relating to transactions subject to e-reporting, updating of the documentation constituting the reliable audit trail, preservation and storage of invoice files.

The reform’s deferral is no reason to kick preparations down the road. It is now urgent to identify what you need to do to align your IT systems, and decide how you will go about satisfying your new obligations, choosing the solution best suited to your situation from among the various options available under the regulations.

Our specialist VAT lawyers and our dedicated Tax IT team will assist you at all stages of preparing for this reform:

• Identifying what you need to do to adapt and any potential issues you need to consider

Our teams can assess what adjustments you need to make, taking into consideration your specific situation – i.e., what business you are in, the type of transactions you perform and how you currently go about invoicing and recording them, and any other developments you may already have in the pipeline (such as the creation of a VAT group in 2023).

We can help you decide whether partnering with a PDP is the way to go and, if so, on what basis. And we can also pinpoint key issues to consider when adapting your IT systems.

• Overseeing your preparations

Our VAT specialists and tax IT team can work with you to ensure that your new system is suited to your business and will satisfy the legal and technical requirements of the reform.

Our teams have been actively involved in shaping this reform, contributing extensively during the consultation phase. This puts us in an ideal position to clarify any remaining uncertainties and give you an insight into what to expect looking ahead, such as pre-filled VAT returns or alignment of the French reform with the European Union’s , likely to become binding on all Member States in the very near future.draft Directive on VAT in the digital age (ViDA)

All CMS Francis Lefebvre teams work together to offer specialist support covering all the various legal and tax consequences of this reform, looking at how it will affect your business relations and payment periods, ensuring your updated systems are GDPR-compliant, keeping your confidential information safe, and so on.
 

E-invoicing and e-reporting video (1/2)

E-invoicing and e-reporting video (2/2)

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