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Insights Implementation of e-invoicing and e-reporting obligations in France: VAT in a new digital era

Implementation of e-invoicing and e-reporting obligations in France: VAT in a new digital era

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published on 8 February 2023 | reading time approx. 9 minutes

    
The implementation of e-invoicing and e-reporting obligations in France should ultimately affect around 4 million businesses exchanging more than 2 billion electronic invoices each year. With the adoption of the amended finance law for 2022, the French legislator has legalised these new VAT obligations[1]. 

 



 
While the scope and regime of the e-invoicing and e-reporting obligations have not been amended compared to the government's initial draft (Ordinance No. 2021-1190, 15 September 2021), Decree No. 2022-1299 of 7 October 2022 and its implementing decree published on the same day introduce some substantial novelties concerning the practical implemen-tation of these new obligations.
 
The reform, which has been postponed for several months, will come into force with regard to the receipt of electronic invoices on 1 July 2023.
 
E-invoicing and e-reporting obligations are being implemented gradually, depending on the size of the company.
  
​Company Size
e-Invoicing and e-Reporting Obligations
​Large companies
​as from 1 July 2024
​Mid-sized companies (“MSC”)
as from 1 January 2025
​Small and medium enterprises (“SME”)
as from 1 January 2026
  

SMEs are defined as companies with fewer than 250 employees and an annual turnover not exceeding EUR 50 million or a balance sheet total not exceeding EUR 43 million. 
 
MSCs are defined as companies which are not SMEs and have fewer than 5,000 employees and an annual turnover not exceeding EUR 1,500 million or a balance sheet total not exceeding EUR 2,000 million.
 

1. Different Platforms for e-Invoicing and e-Reporting Obligations

E-invoices and electronic data will be delivered directly to the Chorus Pro public portal, or indirectly via partner dematerialisation platforms ("PDP") which will have the capacity to provide data in the electronic formats defined by the decree of 7 October 2022[2].
 

The public portal

According to Article 289 bis of the French Tax Code ("FTC"), the public portal will be in charge of centralising all electronic data provided by customers/suppliers and/or their PDPs for the French tax authorities[3].
 
The public portal will also maintain a database register of all PDPs allowing for the secure reporting of data between the public portal and the PDPs or between the PDPs themselves[4].
 

The PDPs (Partner Dematerialisation Platforms)

The PDPs will be private platforms whose objective will be to ensure the secure transmission of data and electronic invoices in a structured format[5]. The PDPs will act as an intermediary by guaranteeing, in particular, the transmission of electronic invoices from the supplier directly to the customer, or indirectly via his PDP. They will also have to ensure the transmission of electronic invoices and data from the supplier to the public portal.
 
The registration of PDPs will be subject to approval by the tax authorities for a 3-year renewable period[6]. For this purpose, the PDPs will have to prove their compliance with their own tax obligations as well as with the General Data Protection Regulation ("GDPR") and will have to guarantee their clients technical solutions in the matter[7].
 
Companies subject to e-invoicing and e-reporting obligations will therefore be able to select the PDP that suits them on the basis of the information contained in the database register. Furthermore, a company may choose different PDPs depending on its customers, its different branches of activity or the location of its different establishments.
 
In practice, the PDPs should be an appropriate intermediary for large companies and MSCs that will not issue e-invoices in a structured format and cannot change their internal IT procedures for invoicing. In addition, the PDP should be an IT support solution for companies that will be issuing invoices frequently, such as in the retail sector.
 
Conversely, the public portal could be used directly by SMEs and micro-enterprises (which would prefer not to use the paid services of a PDP). They will be able to fulfil their e-invoicing and e-reporting obligations by manually filling in the required information on Chorus Pro, which will automatically convert it into a structured format.
 
Currently, the French tax administration has not registered any PDPs. Based on the information provided by the French tax authorities, the opening of the PDP registration service is expected to take place in spring 2023.
 
For instance, the e-invoicing and e-reporting obligations relating will combine a centralised model (via the public portal) and a decentralised model (via the PDPs) as illustrated by the French tax authorities.
   

2. e-Invoicing Obligation

As a reminder, the electronic e-invoicing obligation will concern: 
  • transactions between taxable persons established in France ("domestic B2B");
  • deliveries at public auction of second-hand goods, works of art or collectors' pieces; and
  • certain international transactions, in particular exports of goods shipped outside the European Union (“EU”) by the seller.
 

E-invoicing structured format

In order to limit the risks of fraud related to the use of paper or PDF invoices, the transmission of invoicing information must be carried out in one of the two structured electronic formats Cross industry language (CII) and Universal Business Language (UBL) (based on the European standard EN 16931).
 
Companies will also be able to send their invoices or electronic data in a mixed electronic format (Factur-X) combining an XML structured file (CII16b) and a file in PDF format (PDF/A3 standard).
 
As an exception to the obligation to send e-invoices in a structured format (CII and UBL) or a mixed format (Factur-X), the public portal and the PDPs will have to ensure the electronic conversion of invoices that do not comply with the appropriate format until 31 December 2027.
 
However, it will still be possible to manually input e-invoices and data on the public portal (in the "Portal" mode), which will be converted and directly delivered in a structured format.
 
Ultimately, companies should migrate their e-invoicing systems to the structured formats defined above. If a company cannot change its internal invoicing procedure, in particular due to the high cost of compliance, it may use one or more PDPs.
 

Mandatory information on the e-invoice

The strategy for collecting data useful to the French tax authorities aims to pre-fill VAT returns. 
 
To be considered valid, the e-invoice must include all the following information in a structured format:
  

Data to be provided in structured format as from 1 January 2024 – "Initial Information"

  • SIREN number of the taxable person and the customer
  • Individual VAT identification number of the taxable person or, in case of VAT group, member of the single taxable person, the single taxable person and the tax representative of the taxable person and the customer
  • Taxpayer’s country 
  • Category of transaction: supply of goods, services, or mixed
  • Date of issue of the invoice
  • Unique invoice number
  • Number of the corrected invoice if a corrective invoice is issued
  • Option for payment of VAT on a debit basis
  • Total excluding tax by tax rate
  • Amount of corresponding VAT by tax rate
  • Applicable VAT rates
  • Total amount to be paid before VAT
  • Amount of VAT to be paid
  • Reference of the legal provision in case of VAT exemption
  • Invoice code
  • Mention in case of self-billing
  • Reference to a specific tax regime
  • Mention in case of reverse charge
  • Mention in case of a VAT group ("member of a single taxable person")
  • Date of delivery of the goods or completion of the service
  • Date of the deposit paid if different from the date of the invoice
 

DATA TO BE PROVIDED IN STRUCTURED FORMAT AS OF 1 JANUARY 2026 – "TARGET INFORMATION"

  • Price reduction (rebate, refund)
  • Precise designation of the good or service
  • Quantity of goods or services
  • Price before tax of each good or service
  • Delivery address of the goods (if different from the customer's)
  • Date of issue of the corrected invoice (in case of a corrective invoice)
  • Discount
  • eco-participation
  

3. Electronic Data Transmission Obligation – e-Reporting

As regards the e-reporting, taxable persons established in France will have to communicate information related to international transactions between taxable persons ("International B2B") as well as transactions performed for a non-taxable person ("B2C").
  
  
 
 
 
  
Finally, taxable persons not established in France but liable for VAT in that country in respect of supplies of goods and services will be subject to the obligations to report transaction data electronically, unless they benefit from the OSS-IOSS.

E-reporting process

For "international B2B" transactions, the issue of an invoice will be mandatory. These invoices will have to be sent by the taxable person directly to the public portal or indirectly via the PDP. In this context, the data to be collected will be identical to that of the e-invoicing procedure.
 
For B2C transactions, the following data should be reported to the public portal or PDP in XML format:
   

TRANSACTION DATA TO BE REPORTED (INVOICE)

  • SIREN number of the taxable person
  • Date of invoice
  • Mention of the option to pay VAT on the basis of debits
  • Total amount before tax and the amount of VAT by tax rate
  • VAT total amount 
  • Currency

  

TRANSACTION DATA TO BE REPORTED (NO INVOICE)

  • SIREN number of the taxable person
  • Payment date
  • Payment amount
  • Number of daily transactions
  • Period for which the transmission is performed
  • Mention of the option to pay VAT on the basis of debits
  • Total amount before tax and amount of VAT by tax rate
  • VAT total amount 
  • Currency
  

In addition to transaction data, payment data will also have to be reported to the French tax authorities. Only service transactions subject to e-invoicing and e-reporting (with the exception of VAT reverse charge cases) will be concerned by the e-reporting of electronic payment data.
 
In this context, the payment data to be transmitted will be the following:
  

PAYMENT DATA TO BE REPORTED

  • SIREN number of the taxable person
  • Period for which the transmission is made or the date of the invoice
  • Date of the actual collection 
  • Amount collected by VAT tax rate
  • Invoice number

  

Frequency of e-reporting

The e-reporting shall be made at the frequencies determined below:
 
 

  

4. Sanctions

In case of non-compliance with the e-invoicing and e-reporting obligations by the taxable person, the latter shall be fined a fixed amount of €15 per invoice and €250 per non-transmitted data up to a maximum of €15,000 per year and per obligation.
 
If the PDP fails to fulfil its obligations, the penalty will also consist of a fine of €15 per in-voice and €750 per non-transmitted data, this time up to a limit of €45,000 per year and per obligation.
 
The PDP's registration may also be withdrawn in the event of fines of more than €60,000 where they have been imposed on three occasions in two consecutive years.
   

[1] Art. 26 des Finanzberichtigungsgesetzes für 2022
[2] Art. 290-III du CGI
[3] Art. 242 nonies G, Annexe II du CGI
[4] Art. 289-III du CGI, art. 242 nonies D, Annexe II du CGI et art. 41 septies B du CGI
[5] Art. 242 nonies H, Annexe II du CGI et art. 242 nonies J, Annexe II du CGI 
[6] Art. 290 B du CGI 
[7] Art. 242 nonies B, Annexe II du CGI

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