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19 September 2022

France to implement new VAT e-invoicing requirements from 1 July 2024

  • The French Parliament has adopted mandatory e-invoicing and real-time reporting reform for value added tax (VAT).
  • E-invoicing will apply to all transactions between entities subject to VAT and the transmission of transaction data with effect from 1 July 2024.
  • The Government has published the main detailed technical specifications for e-invoicing for discussion with businesses and software providers.

Background

The new e-invoicing system that is being introduced in France will apply from 1 July 2024. It covers invoices for all transactions between entities subject to VAT issued in electronic form and provides that the data they contain should be transmitted to the tax authority in real-time. The reform follows on from the requirement for e-invoicing for all business relations with the public sector. The French Government states that this reform has four objectives:

  1. To simplify business life and enhance competitiveness through the reduced administrative burden, reduced payment times and productivity gains resulting from e-invoicing.
  2. To eventually simplify VAT reporting obligations by pre-filling the declaration form.
  3. To improve fraud detection, in the interest of economic operators acting in good faith.
  4. To improve real-time knowledge of business activity.

Software specifications

The French Agency for State Financial Information Technology published the External specification file for electronic invoicing, which is now also available in English. It contains documents describing the formats for exchanges with the public invoicing portal (or certified third-party platforms) in the context of the extension of e-invoicing to all transactions between entities subject to VAT and e-reporting of international transactions and business-to-customers sales (resulting from final adoption by the Parliament in Article 26 of Amended Finance Bill dated August 16, 2022).

This document specifies the requirements for submission, reception and transmission of e-invoices, retrieving information on the invoice life cycle, and transmission of data to the tax authority in the context of international business-to-business transactions and transactions between businesses and end consumers in France. This document is not a user guide but provides all e-invoicing stakeholders with a functional overview of the target solution for business-to-business exchanges. It also specifies essential points such as formats, the directory and exchange protocols. The agency states that the external specifications are subject to change to comply with subsequent legislation.

This guidance is intended for:

  • All companies issuing or receiving invoices
  • Public legal entities issuing or receiving invoices
  • Software editors of financial solutions
  • Software editors of dematerialized exchange platforms
  • Third-party remote transmission operators
  • IT service providers responsible for managing platforms
  • Representatives acting on behalf of the issuers or recipients of invoices

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CONTACTS

For additional information with respect to this Alert, please contact the following:

Ernst & Young Société d'Avocats, Indirect Tax, Paris

Document ID: 2022-1401

 

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