E-Invoicing presentation
I'm moving to electronic invoicing
Why the move to extend electronic invoicing to between all companies?
Since 1 January 2020, all French companies have been required to send their invoices to public sector entities in electronic format. All these invoices go through Chorus Pro, with a total of nearly 140 million invoices exchanged since 2017. However, the rate of paperless business-to-business transactions remains low, generating extra costs for companies.
Article 26 of the 2022 Supplementary Budget Act provides for mandatory electronic invoicing in exchanges between companies established in France and subject to VAT. This has several goals:
- enhancing business competitiveness by lessening the administrative burden, reduced payment times and productivity gains resulting from a paperless approach. For a company, the cost of an electronic invoice is less than that of a postage stamp, whereas the cost of a paper invoice is more than €10;
- eventually simplifying companies’ VAT reporting obligations by pre-filling the declaration form; • improving fraud detection, in the interest of economic operators acting in good faith;
- improving real-time knowledge of business activity to ensure that economic policy management is as consistent as possible with the economic reality of all stakeholders.
What is an electronic invoice?
In accordance with the new Article 289 bis of the General Tax Code, an electronic invoice is one that is issued, transmitted and received in paperless form and should include a minimum core set of data in a structured format, distinguishing it from a “paper” invoice or a standard PDF.
It will be sent to the customer via an online platform, whether this is the public invoicing portal or another online platform. The universal adoption of electronic invoices guarantees savings for all companies and acts as a driver for modernising the invoicing chain by simplifying its management and monitoring and helping to reduce payment times.
The term “e-invoicing” can refer to electronic invoicing.
What is e-reporting? Why send transaction data?
E-reporting is the transmission of certain information to the tax authorities (e.g. the amount of the transaction, the amount of VAT invoiced) relating to commercial transactions that do not fall within the scope of electronic invoicing. These are transactions involving the sale of products and services to private individuals (or “business to consumer”, BtoC, transactions, such as retail trade) or transactions with operators established abroad (exports, intra-community shipments, etc.). E-reporting makes it possible to reconstruct the overall economic activity of a company: supplementing electronic invoicing, it will eventually allow companies to benefit from pre-filled VAT return forms.
How will I issue and receive my invoices?
You will receive your suppliers’ invoices in electronic format through the platform(s) that you have chosen. This may be the same platform as your supplier, a different platform, or the public invoicing portal. Similarly, to issue invoices to your customers, you must use the services of a platform. All companies are free to select the online platform(s) of their choice, a registered private platform and/or the public invoicing portal, based on their needs. The platform must be able to provide you with a readable version of your invoice if you wish.
E-invoicing: electronic invoicing
Which transactions are subject to electronic invoicing?
Electronic invoicing concerns all transactions for the purchase and sale of goods and/or the supply of services carried out between companies established in France and subject to VAT when they are so-called domestic transactions, i.e. those concerning the national territory. Such transactions are called business-to-business (BtoB) transactions. However, mandatory electronic invoicing does not apply to transactions that are exempt from VAT under Articles 261 to 261 E of the General Tax Code, and exempt from invoicing. This applies in particular to transactions in the field of health (Article 261, 4, 1°), education and training services (Article 261, 4, 4°), real estate transactions (Article 261, 5), transactions carried out by non-profit associations (Article 261, 7), banking and financial transactions and insurance and reinsurance transactions (Article 261 C).
How will I invoice in the future? Can I still send an invoice directly to a customer?
Invoicing arrangements will remain the same. The mandatory information required by the Commercial Code and the General Tax Code will be the same. Four new items of information will be made mandatory for management purposes. Companies subject to mandatory e-invoicing will send their invoices to their professional customers (BtoB transactions) via a registered private online platform that will actually send the electronic invoices to the customer’s online platform.
How will I receive my suppliers’ invoices?
You will receive your suppliers’ invoices in electronic format via your chosen platform(s). This may be the same platform as your supplier, a different platform, or the public invoicing portal. All companies are free to select the online platform(s) of their choice.
How often must I submit an electronic invoice?
There is no specific deadline for submitting an electronic invoice: taxable entities will continue to submit their invoices in the normal course of business.
E-reporting: sending transaction data to the tax authorities
Who is subject to transaction data e-reporting?
All companies subject to VAT and established in France are concerned by the e-reporting of transaction data when they carry out transactions with private customers (business to consumer, BtoC) or with foreign operators (companies or private individuals). Certain foreign companies not established in France may be subject to mandatory e-reporting when the transaction is carried out with an entity not subject to VAT (usually a private individual, but it may be an association or a public entity) or a taxable entity not established in France, and the transaction is deemed to take place in France under the rules of the General Tax Code.
Which transactions are subject to e-reporting?
Transactions that require the transmission of data (e-reporting) concern companies subject to VAT in France that trade with private individuals and non-taxable entities in general (BtoC), or with companies that are not established in the national territory (i.e. taxable entities with no establishment, domicile or habitual residence in France).
Companies not established in France, or their tax representative where applicable, must also send transaction data for transactions located in France carried out with non-taxable entities (private individuals in particular) or other taxable entities not established in France.
However, the scope of e-reporting does not include transactions that are exempt from VAT under Articles 261 to 261 E of the General Tax Code, and exempt from invoicing. This is the case, for example, with certain banking and insurance transactions, medical and health services, educational services and transactions carried out by non-profit organisations managed without personal gain.
How do I send my transaction data to the tax authorities?
In general (except in certain special cases relating to international transactions), data on transactions submitted via e-reporting, the list of which is set out by a decree, must be sent by the company carrying out the transaction via a private online platform registered by the tax authorities or via the public invoicing portal.
There will be several methods and formats for sending data. If you have cash register software, the data included in the daily data summary report of a point of sale (Z report) may facilitate the transmission of the required data in a structured, paperless format. If you issue e-invoices to your private individual customers, you will be able to submit them directly in a structured, paperless format on the registered private online platform of your choice or on the public invoicing portal. Either option will solely extract the data for e-reporting as required by the tax authorities. In the latter case, however, the platform you use is not obliged to send the invoice to your customer: it will depend on the platform’s commercial offer and your contract with it.
If the company does not have cash register or invoice filing systems or software, it will have the option to enter or forward a summary report of transactions carried out over the period. Data transmitted for e-reporting will be limited to the amount of the transactions and the corresponding VAT.
Electronic invoicing and registered online platforms
Online platforms will play a central role in the electronic invoicing system and the transmission of information to the tax authorities (e-reporting).
Taxable companies must use the services of an online platform to send and receive their electronic invoices and to forward transaction and payment data to the tax authorities.
They are free to select one or more registered private online platforms or to use the public invoicing portal directly.
You can find out more about the scheme for sending invoices and data in the section – Find out more > The "Y"scheme.
What is the purpose of a registered private online platform?
An online platform is a service provider with several roles:
- Issuing, sending and receiving the electronic invoice from the supplier to the customer. In its role as an intermediary, it will convert the supplier’s invoice format into a format that suits the customer. These operations will be carried out under conditions that must ensure, in particular, the integrity, authenticity, readability and completeness of the data;
- Extraction of certain invoice data and its transmission to the tax authorities (e.g. identification of the supplier and customer, transaction amount excluding VAT, amount of VAT due, VAT rate applied, etc.);
- Forwarding transaction data that is not subject to an electronic invoice to the tax authorities;
- Transmission of payment data for all transactions.
Is this a matter of certification/approval/registration?
A registered private online platform will be a platform registered by the tax authorities. To this end, a dedicated department has been set up within DGFiP. Registration will be granted based on an application file submitted by an operator that meets the requirements to be imposed by regulation. An operator must therefore provide sufficient guarantees and demonstrate its ability to perform the functionalities expected of a registered private online platform. The list of registered private platforms will be published on this page.
What is a registered private online platform (PDP)?
A registered private online platform is a platform that has been registered by the tax authorities for a renewable period of three years, under conditions to be specified by regulation. Only a registered private platform will be authorised to provide all the functionalities provided for under the reform of electronic invoicing and e-reporting, namely issuing and sending electronic invoices to the customer, and transmission of invoice data and transaction and payment data to the tax authorities.
How will this be different to a dematerialising operator?
A company may continue to use the services of a dematerialising operator. However, unless registered by the tax authorities, this operator will not be a registered private online platform and hence will not be authorised to send electronic invoices to the platforms of the company’s customers, receive invoices on its behalf, or send invoicing, transaction and payment data to the tax authorities.
DINR PRO le 04/05/23