e-Invoicing mandates and updates: France
Pilot phase of French mandate announced for January 2024
As we have discussed at length in these pages, the French e-Invoicing reform introduces a new CTC (Continuous Transactions Control) model which will be implemented in stages starting from July 2024 and establishes new requirements for all businesses operating in the country.
Under the new mandate, taxpayers will be obligated to issue their B2B domestic invoices electronically replacing traditional paper-based invoices. Additionally, the mandate introduces electronic reporting obligations for transaction data and payments, facilitating a more streamlined and efficient invoicing process. In order for the French tax authorities to access the data, taxpayers, or their authorised providers (PDP) will have to integrate with the Public Billing Portal (PPF).
In a significant next step towards the implementation of their e-Invoicing mandate, the French Ministry of Economy has announced the launch of a pilot phase for electronic invoicing.
The proposed pilot, which will run between January and June 2024, aims to test the viability and effectiveness of the new electronic invoicing model in real-world conditions. The pilot phase will involve all stakeholders, including the Public Billing Portal (PPF), partner platforms (PDPs), and taxpayers.
Enterprises interested in participating in the pilot phase are required to submit their applications by the deadline of 26 June 2023. Following the evaluation process participants will be notified of the results. This will provide businesses with an opportunity to assess their eligibility and prepare for compliance with the upcoming e-invoicing regulations.
OpenText invites customers and prospects to partner with us if they wish to participate in this pilot program, or to check their readiness for the e-Invoicing mandate using our e-Invoicing mandate readiness check service. Reach out to your OpenText account representative, or contact us here.
Updated technical guidelines for e-Invoicing mandate reform
On 31st January 2023, the French tax authorities (Direction Générale des Finances Publiques – DGFiP) published a further revision to the B2B external specifications as part of their e-Invoicing mandate reform.
The revision includes changes to specific invoicing use cases such as those around factoring, debit notes, down payments, discounts, and margin schemes. Further admissions cover changes to the process for adding attachments to an invoice, as well as clarifications around transmission procedures and the role of PDPs.
The full specifications (in French) can be found on the French government website.
e-Invoicing mandate Readiness Check service for France: OpenText Professional Services
As we begin to approach the 2024 deadline for the French reform, companies must prepare their internal systems for the necessary changes that will be required. Many organizations lack the internal resources or knowledge and expertise required to evaluate their ability to meet the requirements.
The OpenText Professional Services team, in conjunction with tax experts, has prepared a robust methodology for analyzing organizations’ output data against the published requirements for e-Invoicing and e-Reporting reform.
Whether companies are still using paper and PDF invoices or have already switched to fully automated electronic invoicing, they will invariably find gaps between the output they produce today, and the additional mandatory and conditional fields required by the new French legislation.
With further updates recently published by the French authorities it’s increasingly important that companies validate their readiness.
OpenText professional services will perform a systematic analysis of the data produced by a companies’ ERP or other line-of-business application, evaluating the data for conformity to the format and content of the required output.
After this review, OpenText will host a workshop to walk through the findings and consultation on any identified gaps, providing organizations with the tools to properly assess the risk and potential impacts, as well as guidance on how to resolve any potential issues.
See our service overview for more information and reach out to your OpenText sales representative to follow up.
Updates to legal framework, FAQs and list of data fields for French e-Invoicing mandates
As we move ever closer to the 2024 French mandate, further legal and technical updates have been forthcoming.
Decree No. 2022-1299 and the October 7 2022 Order relating to the generalization of electronic invoicing were published, confirming the timeline of the roll-out and adding further detail around the obligations for PDPs (accredited service providers), the outline for the centralized directory, and more information about the e-Reporting framework.
The technical specifications have also been updated to clarify some new data fields which are required to be included on electronic invoices. The list can be found on page 16 of the current technical specifications (in French) which are available on the tax authority website.
In addition, there have been amendments within the e-Invoicing / e-Reporting FAQs which may better help businesses understand the requirements. The latest FAQ for French electronic invoicing can be found here (also in French).
For more information about these changes and any clarification you might require about the obligations in France for 2024, please reach out to your OpenText sales team and arrange a consultation with our French tax and e-Invoicing SMEs.
The latest specifications for the French e-invoicing mandate
The French e-invoicing mandate is expected in 2024 so companies still have some time to prepare. Here are three important aspects of these new mandates.
Timeline and mode of inception
There is a clear distinction between the timeline for outgoing and incoming invoices. When it comes to issuing invoices to your clients, the new obligations will take effect for you according to the size of your company. Large companies will have to issue all invoices electronically from July 2024, mid-size companies in January 2025, and SMEs and micro-enterprises in January 2026.
Method of sending and receiving e-invoices
Companies have two options for issuing and receiving e-invoices in France, either they may use an accredited private service provider (Plateforme de Dématérialisation Partenaire: PDP) or they can choose to directly use the E-invoicing Public Portal (Portail Public de facturation – PPF).
While use of the PPF is free, which of course may seem appealing, companies should note that according to the French tax administration themselves, this will only provide a minimal service. It is clearly targeted for microenterprises with limited technical infrastructure to ensure that there remains an affordable basic option. For SMEs and enterprises, the use of a service provider such as OpenText is recommended.
While on the face of it, the long preparation period granted to companies may appear to provide plenty of breathing space, as we write this in July 2022 the French tax authority has still failed to finalize key technical details, has not published all the relevant regulatory texts, nor have they issued all of the necessary decrees required to give the regulations weight in law. So there is a lack of certainty which leads to concerns about the feasibility of the schedule.
And while the gradual phasing in of these requirements on the surface seems to provide even more time at least for the majority of companies, the fact remains that all companies established in France must be ready to receive e-invoices sent by their suppliers from July 2024.
Of course, this makes perfect sense since the large enterprises mandated to send e-Invoices in phase 1 can in principle be issuing invoices to any size of business, but it does mean that first deadline of July 1st, 2024, effectively applies to all businesses.
Within larger enterprises, issuance and reception of e-Invoices is often performed by different applications owned by different departments – AP vs AR, purchasing/procurement versus sales, even potentially different applications for indirect materials procurement and direct materials and so ensuring that all applications and processes comply by the correct date is imperative.
Format of e-invoices
The French regulations allow for a number of different formats for the issuance of invoices, with multiple structured formats (UBL, CII, etc), unstructured formats (native PDF), or hybrid formats (Factur-X – the Franco-German collaboration based on the German ZUGFeRD format). This is also one of those areas where the direct usage of the public invoicing portal as discussed above will limit the options.
For those choosing to issue their invoices directly via the PPF portal, only UBL, CII and Factur-x can be used, whereas the use of a service provider will allow companies to use other structured formats such as the widely used EDIAFCT standard for example.
The diversity of formats available for those using service providers will be a great benefit for companies already invoicing electronically since, potentially, it allows them the freedom to continue to use existing formats with very little change. But for those companies relatively new to e-Invoicing it presents greater complexity both for generating invoices and also for receiving and integrating various formats into their ERP and Accounts Payable applications.
The selection of one format rather than another for issuing or receiving invoices must be considered carefully in order to arrive at the best format to meets not only tax requirements but also the business and IT requirements/ constraints.
Businesses must remember that while there are many options, this does not suggest a laissez faire attitude to the content and structure of the invoice, which must still meet the mandatory guidelines.