Status of B2B Electronic Invoicing in France
Francia avanza en su nuevo sistema de tributación electrónica para las empresas privadas. En estos momentos se encuentra ultimando los detalles del nuevo modelo de facturación electrónica B2B y e-Reporting. Para ello la autoridad fiscal francesa Direction Générale des Finances Publiques (DGFiP) junto con la agencia estatal Agence pour l'Informatique Financière de l'Etat (AIFE), han organizado una serie de grupos de trabajo con empresas y prestatarios tecnológicos, entre los que se encuentra EDICOM.
Analizamos las características del nuevo modelo de facturación electrónica francés con las últimas novedades anunciadas por el gobierno.
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New e-Invoicing and e-VAT Reporting System
The Direction Générale des Finances Publiques (DGFiP) has announced the framework for the new tax model. These guidelines are based on the results of the pilot phase and evaluation carried out with stakeholders (companies, technology providers, and government).
The new tax scheme includes mandatory electronic invoicing between private companies, as well as electronic reporting of accounting data.
Goals of the New System
Some objectives pursued by the government with the implementation of e-invoicing include:
- Prevent and combat tax fraud.
- Reduce the costs of tax control.
- Streamline tax returns.
- Increase competitiveness by reducing costs.
- Improve understanding of the economic situation with real-time reporting on business activity.
Which Companies will be Affected?
All businesses subject to value-added tax.
Proposed Model: Y-Scheme
In the report, the government evaluated two possible schemes, labeled "V" and "Y". The V-Scheme was based on the system in place in Italy, while the Y-Scheme was closer to electronic invoicing systems in Latin America.
The French government has decided to opt for the Y-Scheme. In this model, electronic invoices are validated by a Certified Provider prior to being reported to the government. One of the countries that served as a reference for this model is Mexico. The success of its CFDI tax system has become an example for many other countries.
The DGFiP has announced that companies must use a “Dematerialization Platform Partner” (Plateforme de Dématérialisation Partenaire - PDP) that will act as a trusted third party. The role of the PDP will be to transform, validate and send invoices to the French tax authority.
The government plans to leverage the infrastructure of Chorus Pro, the current portal for e-invoicing with public administrations. It will be adapted to the new B2B e-invoicing system.
Chorus Pro: National B2B2G e-Invoicing Portal
Chorus Pro will become the public invoicing platform, it is currently being used for B2G transactions to declare, transmit and receive electronic invoices by public administrations. New characteristics will be added to implement the new system which include the management of B2B invoicing and e-reporting.
New Chorus Pro plataforme publique de facturation electronic (ppf)
- The DGFiP middleware will centralize the tax declaration flows sent by the Certified Private Platforms, transmitting them to the DGFiP's information service.
- Update to the new Annuaire.
- Demat Operator: Small companies can use Chorus Pro as a manual platform for exchanging electronic invoices.
e-Invoicing Information Flow
In the Y-Scheme, companies create electronic invoices and accounting documents, sending them to the Certified Private Platform for validation. The CPP performs all relevant controls required by the DGFiP and, after the invoices are verified, delivers them to their recipients. The CPP will also report the necessary tax information to the DGFiP through Chorus Pro.
If one of the trading partners does not have a Certified Private Platform for receiving or sending invoices, they will have to report or consult the documents manually on the government platform.
The Y-Scheme contemplates various information flows depending on whether the companies have a Certified Private Platform.
The DGFiP has also created the Annuaire, a centralized register with the identification data of companies to facilitate the exchange of electronic invoices between private companies and government entities.
To speed up the process, EDICOM is preparing to offer a centralized and integrated e-invoicing solution to generate, receive, send, and store electronic invoices in line with the French government’s requirements.
Annuaire – Centralized Company Directorate
Among the latest measures announced by the ministry of economy and finance exists the new Annuaire. It is a centralized directory where all parties will be able to search for the necessary information to correctly route electronic invoices.
The Annuaire Includes:
- Information to identify invoice receiving companies, including details about their structure to more easily manage issuance for companies.
- Identification of dematerialization platforms (PDP) that companies use to receive electronic invoices.
The Annuaire will be available to PDP’s and the government.
Invoice Status Management
The flow of electronic invoice interchanges in France obligates companies to generate notifications regarding the status of the transaction, considering the entire life cycle of the issued documents. The goal is to have complete traceability over the document and to rapidly detect any possible issue during its life cycle.
Up to 12 different statuses can be issued to the French tax authority, but only 3 will be mandatory.
The mandatory statuses are:
- Debit option (accounting aspect for VAT)
- SIREN (VAT ID).
- Delivery Address or place where service is offered.
Besides electronic invoices, companies will have to report a series of digital tax reports, depending on their commercial transactions. Currently it has been stated that the following information must be reported:
- Information related to the payment
- Information related to B2C transactions
- Information related to international B2B transactions
The declaration system will be different depending on the type of data that need to be declared.
Electronic Invoice Format
The electronic invoice information will need to be issued in UBL, CII, or Factur-X formats.
The implementation has been postponed from 2024 to 2026. The government has published a new compliance timeline for the new electronic invoicing and e-reporting system based on a company’s size:
- 07/01/2024: Mandatory electronic invoice and e-reporting issuance for large companies and reception of e-invoices for all.
- 01/01/2025: Mandatory electronic invoice and e-reporting issuance for medium sized companies.
- 01/01/2026: Mandatory electronic invoice and e-reporting issuance for all other companies and taxpayers
Evolution of B2B e-Invoicing in France
- 1990: Article 27 of law n° 90-1169 grants the same legal validity to electronic invoices as to paper invoices.
- 2010: The European Union publishes Directive 2010/45/EU regulating the use of electronic invoicing in the private sector of the Member States.
- 2012: Transposition of the European Directive into French law n° 90-1169 De Finances Rectificatives.
- 2019: Law N° 2019-1479 De Finances for 2020 announces the intention to make e-invoicing between companies mandatory.
- 2020: e-Invoicing pilot project is conducted with 50 companies.
- 2020: French tax authority Direction Générale des Finances Publiques (DGFiP) publishes a report with general guidelines for the B2B e-invoicing system.
- 2021: Ordinance nº2021-1190 is the legal framework associated with the mandatory use of the electronic invoice for B2B transactions.
Moving Toward a B2B2G e-Invoicing Model
Electronic invoicing has existed in France since 1990. The culture of document dematerialization is deeply rooted in French companies, putting them ahead of European Union directives. France was among the first European countries to adopt electronic invoicing for public administrations.
Since 2020, both public administrations and their suppliers are required to exchange electronic invoices through the French state platform, Chorus Pro.
Given the positive results of B2G e-invoicing, the government decided to extend its mandatory use to private companies. However, unlike the Italian model, France has decided to delegate the validation of invoices to CPPs in their B2B e-invoicing model.
Awaiting the Technical Standard
The technical and legal requirements to adapt to the new model are expected to be published in September, according to article 46 of amendment N°II-3211 of the draft Finance Law of 2021. Requirements will include the format of the various tax documents, the conditions of the Plateformes Privées Certifiées (CPPs), and the periodicity of e-reporting declarations.
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