Glossary of electronic invoicing

• B2B/B2C/B2G: acronyms used to categorise business relations based on the nature of the parties involved:

o    B2B (Business to Business) relations are those between two taxable persons,
o    B2C (Business to Consumer) relations are those between a taxable person and a private non-taxable person,
o    B2G (Business to Government) relations are those between a taxable person and a public entity.

• Company established in France: a company is established in France for VAT purposes when it has established its business in France, when it has a fixed establishment from which goods are shipped or services provided or used, or else whenthe place where it has its permanent adress or usually resides is in France.

• Controls: verifications performed by the PPF to ensure all invoice flows are correctly processed. There are four different types of control:

o    Technical control of the flow,
o    Application controls,
o    Functional controls,
o    Business controls.
If any issues are identified, the flow in question may be declared inadmissible or the invoice rejected or else refused by the recipient.

• Chorus Pro: the existing invoicing platform used by all suppliers (both public and private) serving the French public sector (State bodies, local authorities, etc.). It was set up to satisfy the EU’s requirements for electronic invoicing in public procurement. The French tax authorities have stated that the PPF will be modelled on Chorus Pro (minimum base of services).

• Directory: managed by the PPF and populated by the PPF and the PDPs, the directory lists all buyers, together with the PDP(s) they use, if any.

• E-invoicing (electronic invoicing): requirement to issue and receive invoices in electronic format.

• E-reporting (transmission of transaction data in a structured format): requirement for businesses to provide the following data to the French tax authorities in electronic format:

o    certain data on transactions not covered by the e-invoicing requirement (B2C and international B2B transactions),
o    certain data on payments when the associated VAT is due upon receipt of payment.

• Exempt transactions (FTC, Articles 261 to 261 E,): transactions that are exempt from the new e-invoicing and e-reporting requirements, pursuant to Articles 261 to 261 E of the French Tax Code (FTC). For example, care services, teaching, certain banking and financial transactions as well as certain leasing services are all exempt.

• Flow: the PPF processes four different types of flow:

o    E-invoicing flows,
o    Life cycle flows,
o    E-reporting flows,
o    Directory flows.

• Flow exchange mode: businesses can choose between transmitting and exchanging flows using the PPF directly (Portal mode) or via their own systems and software (EDI or Service mode).

• Formats: predefined by the French tax authorities to facilitate the exchange of invoices and extraction of invoicing data, based on European standard EN16931. More specifically, there are semantic formats and syntactic formats.

• Identification number: a business’s SIREN registration number (or the SIRET registration numbers for its establishments, if it prefers to be identified at that level). This number is used to identify each business for the purposes of e-invoicing and e-reporting.

• Intermediate-sized enterprise (ISE) : a company :

o    fewer than 5 000 employees, and
o    either an annual turnover not exceeding €1.5 billion or a balance sheet total not exceeding €2 billion.

• Interoperability: capacity of a network, here the electronic invoicing ecosystem (hte PPF and the PDPs) to allow all the systems involved to communicate with each other, through the minimal base of formats, and the measures implemented to identify users and secure the access and the use of the directory.

• Invoice status: one of various statuses assigned to an invoice throughout its life cycle. These may include: submitted, issued via the platform, received by the platform, made available, in hand approved, disputed, suspended, refused, payment received, rejected, etc.

• Invoicing circuits: different routes that invoices and data may follow within what is referred to as the Y scheme:

o    Circuit A (issuer and recipient both use the PPF directly),
o    Circuit B (either the issuer – Circuit B2 – or the recipient – Circuit B1 – uses a PDP),
o    Circuit C (both issuer and recipient use a PDP).

• Large enterprise: a company with:

o    at least 5,000 employees, or
o    an annual turnover in excess of €1.5 billion, or
o    a balance sheet total exceeding €2 billion.

• Legible/Readable version of the invoice : an invoice is legible or readable when it “can be read without difficulty by both the user and the Authorities, on paper or on screen” (French tax authorities’ guidelines: BOI-TVA-DECLA-30-20-30-10, paragraph 100).

• Life cycle: all invoice statuses used to track the progress of invoice processing (submission, availability, validation, payment, etc.). The nominal life cycle of an invoice include mandatory statuses required by the authorities and others status concerning all. The parties involved in each invoicing circuit that can be mandatory or recommended/optional.

• Management case: specific e-invoicing processes described by the French tax authorities. Each management case reflects a specific set of circumstances: payment terms (e.g. deposit, instalments), invoicing method (e.g. simplified or standard) and whether any third parties are involved (e.g. in placing the order, issuing the invoice or making payments). The current external specifications for e-invoicing dated 31 January 2023 detailed 35 different management cases.

• Mandatory information: information that must be included on all invoices by law, (FTC Annex II, Article 242 nonies A,) and economic regulations. The e-invoicing reform will entail certain changes to the list of mandatory information.

• Non-partner dematerialising operator (OD): a private service provider not registered with the authorities as a PDP. E-invoicing operators can act as intermediaries in issuing and receiving invoices but are not authorised to transfer invoices directly from an issuer to the recipient or to extract the requisite data for the tax authorities.

• Original: means the original invoice, i.e. the invoice as issued and transmitted, in its original format. The reform renders this term obsolete.

• PDF (portable document format): a file format satsifying certain established specifications (standardised under ISO-32000 since 2008). Depending on the version used, it may be possible to incorporate other files within a PDF, creating a “mixed format” – one of the accepted syntactic formats for e-invoices. During the initial transitional period after the reform (up until 31 December 2027), PDF files created using other versions will also be accepted.

• PDP (registered private platform): a private service provider registered as such with the French tax authorities and offering its clients certain standard secure services: creating e-invoices, ensuring direct transmission between issuer and recipient, extracting and reporting to the tax authorities all the transactions data required via the PPF. The French tax authorities will compile and publish a list of all registered PDPs.

• PPF (public invoicing portal): a public portal offering a minimum base of services for the exchange of electronic invoices. It will be modelled on the Chorus Pro system (for B2G invoicing) and managed by the AIFE (French Agency for State Financial Information Technology). Businesses will be required to provide the PPF with certain data on their economic transactions, through either their e-invoicing or the mandatory e-reporting for transactions that are out of the e-invoicing obligation scope. The PPF will then transmit the data to the French tax authorities.

• RAT (reliable audit trail): taxable entities that do not use an advanced electronic signature or tax-compliant electronic data interchange (EDI) procedure are required to implement a system of controls to ensure that a chronological record is kept of the entire invoicing process, from the transaction through to the invoice itself. The reliable audit trail constitutes documentary proof that each invoice issued or received duly reflects the associated transaction (supply of goods or services), by demonstrating a direct link between that transaction and the corresponding invoice.

• Semantic format: a model defining the core elements of an electronic invoice.

• SME (small- and medium-sized enterprise): a company with:

o    fewer than 250 employees, and
o    either an annual turnover not exceeding €50 million or a balance sheet total not exceeding €43 million.

• Syntactic format: a file format in which electronic data can be submitted directly to the PPF or to which they must be converted by a PDP (when used), enabling the authorities to extract the requisite data. The following syntactic formats are accepted:

o    Cross Industry Invoice (CII),
o    Universal Business Language (UBL),
o    Factur-X invoice – a mixed format incorporating both an XML file (CII16b) and a PDF (PDF/A3 standard).

• VSE (very small enterprise): a company with:

o    fewer than 10 employees, and
o    either an annual turnover or a balance sheet total not exceeding €2 million.

• Y scheme: refers to the model according to which a business can choose between using the PPF directly or going through a PDP to comply with its e-invoicing and e-reporting obligations. A business may opt for different models for issuing and receiving invoices or even depending on the flows between two parties.