France e-invoicing changes and regulations

Around the world, many changes are taking place regarding rules and regulations for global trade. While these changes are slowly being rolled out over the next few years, it’s crucial that enterprises and individuals stay updated and informed on what global compliance means. Failure to do so puts your organization at risk of fines, fees, and restrictions that can slow down your business and stall your growth. 

One such area seeing many changes over the next couple of years is France. Today, we take a deeper look at what people can expect when it comes to doing business within France and what regulations foreign entities need to follow when conducting trade.

France’s e-invoicing regulations and changes

France is working on mandating e-invoicing for all business-to-business transactions by 2026. This rollout started on January 1, 2020, when all business to government transactions were moved to an e-invoicing format. While there is a slow rollout for the rest of their business entities, enterprises would benefit from adopting a digital approach sooner rather than later.

Some specifications on e-invoicing to keep in mind include: 

• As long as the integrity and authenticity of an e-invoice can be guaranteed, all e-invoices must be accepted.
• In France, authenticity and integrity can be proven in one of three ways:
  • Qualified Electronic Signature 
  • Référentiel Général de Sécurité (this is a French specific electronic signature that is not qualified or automatically accepted in other EU member states)
  • Proper electronic data interchange based on the 1994 European Commission  Recommendations (subject to other business controls-based audit trail linking an invoice and a supply)
• E-invoices may be stored abroad in the other EU Member States, as long as the tax authority is notified and given online access.

To support this shift toward e-invoicing, the French government created a free portal called Chorus Portal Pro. This portal helps assist and guide enterprises toward reducing payment times and ensuring compliance with government regulations. With collaboration from Germany, France has developed a standard for e-invoicing that must be met. E-invoices can be created in either XML or PDF formats.

France VAT reporting regulations

There are not many changes in France’s value-added tax (VAT) laws. VAT reporting is governed by the national VAT law, meaning it is standard across the country. VAT returns can be filed monthly, quarterly, or seasonally through an online tax authority portal. While the French version is different from global OECD standards, the principles and objectives are the same. 

If your business is subject to French VAT, you need to be intelligent and concentrated in recording payments. All payments must be recorded in registers that comply with legal requirements. These requirements include:

• Interoperability
• Security
• Retention
• Archiving
• The possibility of providing a daily, monthly, and yearly summary of sales

Facing a tax audit? Businesses must submit their financial data on request from the tax authorities in TXT or XML format in France.

France e-invoicing future forecast

Within the next 4 years, all companies will be obligated to accept and issues e-invoices through a central tax authority program. This rollout will take place over several years. To start, the largest companies will be the first to adhere to the e-invoicing regulations beginning in January 2024. This will impact roughly 300 companies within the country. By January 2025, this law will be extended to include middle-sized companies, totaling nearly 8,000 enterprises in France. Finally, by January 2026, all remaining companies will be required to accept e-invoices. Experts estimate that these measures will impact more than 4 million total organizations. 

E-invoicing compliance and tax law can be challenging to stay on top of. That’s why you need the help and insights from a strategic partner like Tradeshift. Our integrations with compliance experts like Quyntess means you can rest assured that your transactions and processes follow the latest regulations. And, our partnership with tax and regulatory compliance leaders Sovos means you’ll always be a step ahead of the game. Don’t risk fines and fees for global trade; reach out to our team and see how Tradeshift can protect your invoicing and tax processes now and in the future.