Everything you need to know about electronic invoicing: part I

Electronic invoicing will become compulsory from 1 July 2024. This new obligation applies to all businesses according to a progressive timetable.

But what is electronic invoicing? What are its objectives, what are the key dates and who will be affected by this reform?

Let's get a head start and cover the topic in this article.

 

What is electronic invoicing?

Electronic invoicing is the process of creating, sending, receiving and processing commercial invoices electronically, rather than on paper. It involves the use of information and communication technologies to generate, transmit and store invoices.

 

What are the objectives of the government's e-invoicing reform?

• To strengthen the fight against VAT fraud: around €15 billion in France in 2019
• Reduce costs and payment times to improve competitiveness
• Reduce declaration costs and facilitate declarations with, in the long term, the pre-filling of VAT declarations
• Improve real-time knowledge of business activity and the management of public policies

 

Does electronic invoicing apply to me?

This depends on the vendor's VAT status.

The following are subject to the e-invoicing and/or e-reporting obligations:

• Taxable persons established in France and liable for VAT
• Taxable persons established in France who are not liable for VAT, such as micro-entrepreneurs and legal entities benefiting from the basic exemption scheme, as the tax authorities wish to monitor the activities of all taxable persons.

The reform does not apply to:

Those not liable for VAT in France will not be liable for VAT, such as:

• Private individuals
• Non-commercial associations
• Companies not established in France (international B2B)

 

 

What are the key dates for the transition to electronic invoicing?

The roll-out of the e-invoicing obligation will be gradual, taking into account the size of businesses, so that each company can take on its new obligations under the best possible conditions. Electronic invoicing will apply:

• from 1 July 2024, for inbound invoicing to all taxable persons and, for outbound invoicing, to large businesses,

• from 1 January 2025, for medium-sized businesses,

• from 1 January 2026, to small and medium-sized businesses and micro-businesses.

The roll-out of the obligation to transmit data to the authorities (e-reporting) will follow the same timetable.

To sum up, electronic invoicing will become compulsory in France from 1 July 2024, according to a progressive timetable based on the size of businesses. The objectives of this reform are to combat VAT fraud, reduce administrative costs, improve the competitiveness of businesses and facilitate the management of public policies. Electronic invoicing will apply to all VAT-registered businesses established in France, whether or not they are liable for VAT, while non-VAT-registered businesses and businesses not established in France will not be affected by the reform.

All the businesses concerned will have to be able to receive invoices in electronic format from 1 July 2024. It is therefore essential to anticipate this change and take the necessary steps now to ensure that you are ready for it and can benefit from it.

 

Our team can help you with this.