In accordance with European regulations, the scope of the e-invoicing obligation will be extended to all domestic transactions between companies starting 1 January 2023; details depend on their respective turnover/size.
The 2020 French Finance Bill (Article 153) sets four objectives for the introduction of this obligation:
Moreover, the 2021 French Finance Bill (Article 195) further adds that the Government is authorized to adopt by way of an upcoming Ordinance any measure necessary to improve and modernize the management by businesses as well as the collection and control by the administration of VAT, by:
A ratification bill shall be submitted to Parliament within three months of the publication of this Ordinance (from our latest news, the publication of this first text is expected end of September 2021).
Discussions are still ongoing as to the necessary data/format. Still, there is certainty of the fact that the paper invoice will no longer exist as an original: The only original will be a digital one, upon which the VAT deductibility rights will depend.
For the companies in the Financial Services sector, even if largely VAT exempt, this new development requires that the impact of the upcoming changes should be followed carefully, in order to anticipate potential adaptations to processes and IT systems. At the very least, the impact of the reform on the VATable activities should be scrutinized.
If you wish to discuss these topics, please contact: Fidal, Paris
News with a focus on the international Financial Services industry.
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