France has introduced the principle of gradually making the use of electronic invoicing compulsory from 2019 (law no. 2019-1479).
It should be noted that this obligation has already applied to businesses since 1 January 2017 for invoices issued to public entities, using a public "Chorus Pro" portal.
A new roll-out schedule
The reform was initially scheduled to take place between 2023 and 2025. Its entry into force was postponed for the first time, with the launch scheduled for mid-2024 and gradual roll-out until 2026.
Article 91 of the Finance Act for 2024 amends the timetable once again. This gives companies a further breathing space in which to prepare.
The administration has had to draw the consequences of the delay in setting up the Central directory of the Public Billing Portal, which should have been operational during the last quarter of 2023. This Central directory is essential for the smooth operation of electronic invoicing. There has also been a delay in registering partner e-invoicing platforms with the tax authorities. Finally, it seemed preferable to extend the pilot phase for businesses.
The new timetable is therefore as follows:
- The obligation to receive electronic invoices will apply from 1 September 2026, regardless of the size of the company.
- The obligation to issue electronic invoices and the obligation to transmit transaction and payment data will be phased in two stages:
- From 1 September 2026 for large businesses, members of a single taxable entity and medium-sized businesses
- From 1 September 2027 for small and medium-sized enterprises and microenterprises (SMEs).
- However, these dates may be postponed by up to three months by decree, i.e. no later than 1 December 2026 and 1 December 2027.
Membership of a category of company will be assessed at the level of each legal entity on 1 January 2025, on the basis of the last financial year ending before that date or, in the absence of such a financial year, on the basis of the first financial year ending after that date.
There are therefore no group membership criteria to be taken into account. However, it is always possible for an entity to bring forward the implementation deadline.
A group with homogeneous IT systems might therefore have an interest in switching over all the companies concerned at the same time.
Reminder of the scope of the reform
The reform makes the electronic exchange of invoices compulsory for domestic transactions between VAT liable persons established in France. In very limited cases, companies not established in France may be included in the scope.
Article 290 of the General Tax Code provides for the e-invoicing obligation to be supplemented by the transmission of additional data to the tax authorities for non-domestic B2B transactions, and B2C transactions, as well as transaction payment data. The transmission of this data is known as e-reporting.
The reform entails the following obligations for businesses:
- Select a platform (i.e. the public platform or a private platform) to send and receive all invoices exchanged between French professionals.
- Transmit, at regular intervals (at least every ten days for companies declaring VAT on a monthly basis), a precise set of data relating to domestic and international transactions (sales and certain purchases), transactions carried out with non-traders, and payment data relating to service invoices.
In practice, companies will have to make a number of choices depending on their organisation and the specific features of their business:
- Determine whether it is in a position to work directly with the public portal or rather with a private partner (either a certified platform based on specifications defined by the State or a dematerialisation operator),
- Define the grid for receiving supplier invoices in the centralised directory,
- Ensure that its management rules are consistent with the use cases identified by the authorities (e.g. debit notes, expenses, payments on account, management of invoicing mandates or self-billing).
How to prepare for the reform?
Step 1: update or create documentation relating to the reliable audit trail (PAF). This documentation consists of a description of the company's purchasing and sales procedures, with an emphasis on the ongoing controls carried out at each stage to meet certain tax objectives identified by the tax authorities (i.e. control of statements, assurance that invoices recorded in the accounts correspond to real transactions and that they have been processed in accordance with the law).
Step 2: carry out a tax diagnosis of the flows based on a review of the VAT treatment of each of the transactions and the configuration of the information on the invoice. Invoice data will be transmitted in real time to the tax authorities for scheduling tax audits: the company must ensure the legal and tax reliability of the data it transmits.
Step 3: carry out an impact study on all purchasing and sales flows. This study should make it possible to identify the obligations relating to each flow, as well as the scope and frequency of the data to be transmitted. This final stage has a dual objective:
- To know the precise impact of the reform on the company's organisation, so that you can discuss the issues with the various service providers on an equal footing;
- To ensure that the solution chosen is configured precisely and exhaustively, and that it covers all the specific features identified.
Carrying out these preliminary stages will enable you to identify the opportunities to be seized and the cost optimisations to be achieved to make this digital transition a success.
