According to European Directive 2014/55/EU approved by the Council and Parliament, France has been implementing e-invoicing in trade relations between the Public Administration and its suppliers since January 2017 for the 500 largest French companies.
This e-invoicing obligation is extended as of 1 January 2018 to medium-sized companies (250-5000 employees) established in France or non-established in France supplying goods or services to the Public Administration.
The French Tax Authorities put at the disposal of the public suppliers an Internet portal ("Chorus Pro") to issue their electronic invoices to all public administrations of the French State (French State, Central and Regional administrations, public hospitals, public educational institutions, public companies, etc.).
Chorus Pro has two main functions. On the one hand, it acts as a HUB concentrating invoices from suppliers and distributing them to the corresponding public administration. On the other hand, it also provides a function for issuing, uploading and checking the status of e-invoices.
However, for businesses issuing a medium to high billing volume, the entire process of issuing, submitting and storing documents can be carried out automatically by using a structured XML data format which allows integration with the company’s ERP, as well as connectivity with Chorus Pro.
This e-invoicing obligation for public suppliers is expected to be extended to SMEs (10-250 employees) in January 2019 and is expected to be completed in January 2020 by application to microbusinesses.
This New Year is an opportunity to highlight an important practical change for businesses operating in France (companies established in France, permanent establishments in France, etc.).
Until recently, paper invoices had to be stored on French territory in their original format. This burdensome obligation has been lifted in 2017.
The digitalisation of paper invoices is now allowed in order to store an electronic format of the original paper invoices received, subject to conditions (colour code identical to the original paper invoice, use of a PDF format and time-stamped invoice).
Furthermore, the storage on French territory is no longer mandatory. The paper or electronic invoices can be stored on French territory, or in a Country linked to France by a convention providing for mutual assistance for the recovery of tax claims, mutual assistance by the competent authorities in the field of direct and indirect taxation and administrative cooperation in the field of indirect taxation and a right to access by electronic means, download and use the data concerned (Council Directive 76/308/EEC 03/1,5/1976; Council Directive 77/799/EEC 12/19/1977; Council Regulation (EEC) No 218/92 01/27/1992).
Finally, paper invoices or electronically transmitted invoices must be stored within the time limits provided by Article L.102B of the Tax Procedure Code, i.e. for a six-year period. However, we highly recommend storing all accounting documents and invoices for a ten-year period as of the end of the fiscal year in consideration, so that the right to recovery of the tax authorities may be expanded to ten years in limited circumstances.
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