Electronic invoicing in France

Latest Update: v2.2 of External Specifications

On March 31, 2023, France’s Public Finances General Directorate (DGFP) released an updated version (v2.2) of the technical specifications for the e-invoicing and e-reporting system that will be used in France for B2B and B2C transactions, starting in July 2024.

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Version 2.2 of the External Specifications document expands on previous versions and provides more details on how the new e-invoicing and e-reporting system will function in France.

Background

Since 2017, businesses issuing an invoice to or receiving an invoice from a French public entity (business-to-government, or B2G) have been required to do so electronically (e-invoicing) via the Chorus Pro platform.

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In 2021, the French government extended this e-invoicing requirement (with Ordinance no. 2021-1190) to all domestic B2B transactions (that is, transactions between two entities subject to VAT in France).

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For non-domestic B2B transactions and B2C transactions, the government will not require the exchange of e-invoices between the buyer and the supplier. However, companies will be required to transmit specific invoice data and payment details electronically to the tax authority (e-reporting).LaLa

When will e-invoicing be mandatory in France?

Both e-invoicing (domestic B2B) and e-reporting (non-domestic B2B and B2C) requirements will follow the same adoption timeline:

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• Large enterprise = more than 5,000 employees and more than €1.5 billion in annual revenue, or more than €2 billion balance sheet total.
• Intermediate-size company (ISE) = more than 5,000 employees and less €1.5 billion in annual revenue or less than €2 billion balance sheet total.
• SME (including microenterprise) = more than 250 employees and more than €50 million in annual revenue or less than €43 million balance sheet total.

How will e-invoicing work in France?

The French government is introducing a system called the "Y scheme," which effectively combines several e-invoicing models.

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In essence, the Y scheme allows sellers to issue e-invoices either through an intermediary (a PDP or OD) or directly via a public portal (PPF). The system will then route the invoices to the buyers and report the relevant information to the tax authority.

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There are three stakeholders in the Y scheme:

• The public invoicing portal (PPF): A public platform that collects invoices from sellers, stores them and makes them accessible to buyers. The PPF also consolidates invoicing information for the tax authority.
• Registered private platforms (PDPs): Invoicing service providers approved by the tax authority to send e-invoices directly to recipients.
• Dematerializing operators (ODs): Operators offering invoicing services but not authorized by the tax authority to send e-invoices directly to recipients. ODs must connect either to the PPF or to a registered PDP to send e-invoices to buyers.

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As mentioned earlier, the difference between PDPs and ODs is that PDPs are authorized to forward e-invoices directly to buyers without using the PPF as an intermediary. Buyers can choose any invoicing supplier (PDP, OD, or the PPF directly) as their preferred method, and the PDP issuing the invoice on behalf of the seller will comply with this.

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This necessitates that PDPs be aware of the invoicing supplier chosen by each buyer to receive their e-invoices. To make this possible, the French government will create a directory where sellers and buyers can register their preferred service providers for receiving invoices.

• When the buyer chooses an OD as their provider, the PDP will send the e-invoice to the PPF, which will then forward it to the corresponding OD. The PPF will also report the transaction to the tax authority.
• When the buyer selects a PDP as their provider, the PDP will send the e-invoice directly to the buyer's PDP and will need to report only specific fiscal data to the PPF, which will then report the information to the tax authority. This means that PDPs must be able to communicate with other PDPs and the PPF.

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Every PDP platform will support a set of standard formats to ensure seamless interaction with other PDPs. The buyer will specify their preferred e-invoice format for the supply of e-invoices. E-invoices can be generated as structured or hybrid formats, aligning with one of the three foundational formats compliant with the European Union's e-invoicing standard, EN16931. These formats include UBL, CII, and Factur-X.

How can Invopop help?

Invopop helps global companies comply with local e-invoicing and e-reporting requirements. We offer an API that records every sale, converts it to a locally compliant invoice format, forwards it to the buyer, and reports it to the appropriate tax authority, as required by local law.

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If you need support in order to comply with new electronic invoicing requirements, contact us today.