France and e-invoicing 1 January 2023
On November 6, 2020, the French Government (Direction Générale des Finances Publiques: 'DGFiP") introduced mandatory electronic invoicing for domestic transactions between companies (e-invoicing) and an obligation to transmit invoicing and payment data for transactions carried out with individuals or foreign operators (e-reporting)
Starting January 1, 2023, all taxpayers will have an obligation to receive electronic invoices. Large companies would apply the reporting requirements for e-invoicing and e-reporting for outgoing invoices from January 1, 2023. From January 1, 2024, for medium-sized companies and January 1, 2025, for tiny, small, and medium-sized companies.
DGFiP has assessed two e-invoicing approaches: the e-invoicing system in Italy and the electronic invoicing systems in Latin America, such as Mexico.
DGFiP has decided to opt for Latin America. Unlike the Italian model, France has decided to delegate the validation of invoices to CPPs in their B2B e-invoicing model. In this model, electronic invoices are validated by a Certified Provider before being submitted(Plateforme de Dématérialisation Partenaire - PDP). The role of the PDP will be to transform, validate and send invoices to the French tax authority. The government plans that the infrastructure of Chorus Pro, used for B2G e-invoicing, will be used as well for the B2B e-invoicing system.
The flow of e-invoicing data
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 delivers them to their recipients after the invoices are verified. The CPP will also report the necessary tax information to the DGFiP through Chorus Pro. Suppose one of the trading partners does not have a Certified Private Platform for receiving or sending invoices. In that case, they will have to report or consult the documents manually on the government platform.
The current design 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.
The e-Reporting requirement
Besides electronic invoices, companies will have to report specific digital tax reports. Taxpayers will have to submit:
- Payment Data related to the payment
- B2C transactions
- Cross-border B2B transactions