Invoicing and Tax regulation in France

Navigating French evolving e-invoicing and tax regulations can be challenging. This guide provides an overview of the latest requirements to help you stay compliant and avoid potential penalties.

In the guide, we will cover:

Regulations Timeline

French E-invoicing Requirements (2024 Updated)

Tax Regulations

Digital Reporting

Penalties

Achieving Global Invoicing and Tax Compliance with Space Invoices

 

 

Regulations Timeline

A quick overview of all current and upcoming regulations that France mandates regarding e-invoicing and digital reporting. For more details, check out the sections below.

 

Regulations in Effect:

Mandatory e-invoicing for all B2G transactions,

Voluntary e-invoicing for B2B and B2C transactions.

 

Upcoming Changes to French E-invoicing:

Pilot Phase 2024/2025: An opportunity to test your e-invoicing system.

1st September 2026: Mandatory B2B e-invoicing for large and mid-cap companies in France.

1st September 2027: Mandatory B2B e-invoicing for small and medium enterprises in France.

 

 

French E-invoicing Requirements (2024 Updated)

In France, current regulations mandate e-invoicing for all B2G transactions. While B2B and B2C e-invoicing is voluntary for now, B2B companies will be mandated to issue e-invoices, starting in January 2027 with large and medium-sized companies and fully extending in September 2027 to all company sized.

You will also have a chance to participate in a pilot phase scheduled for 2024/2025, providing you an opportunity to test your e-invoicing system, ensuring compliance with both internal operations and French e-invoicing standards, prior to the mandatory rollout.

To support this transition, France has implemented:

The PEPPOL network

Directive 2014/55/EU

A centralized platform known as Chorus Pro.

 

Governmental Body Responsible for E-invoicing

The Agence pour l’Informatique Financière de l’État (AIFE) is responsible for e-invoicing regulations in France.

Click here to visit their official website.

 

E-invoicing Formats

In France, e-invoices are typically exchanged using the XML format, usually in either UBL or PEPPOL BIS Billing 3.0. Businesses connect to Chorus Pro; facilitating the exchange of electronic invoices between B2B and supports the French government’s commitment to streamlined digital invoicing.

 

E-invoice Requirements

Invoices must be issued at the time of the supply and for taxable customers, they have to be issued by the 15th of the month following the supply. They can be issued in either electronic or paper form and must include the following components:

Unique Invoice Number;

Date of issue;

Identification of the Seller and the Buyer: full name, address, and VAT identification number;

Information about Goods or Services Provided: description, quantity, unit price;

VAT Information: total amount excluding VAT, applicable VAT rate, total VAT amount;

Total amount Including VAT;

Currency;

Payment terms: details, including due date and payment method;

Tax Point Date: If different from the invoice date;

Reference number;

Electronic signature: or other means of ensuring authenticity and integrity.

Certain transactions may require additional information:

B2C Transactions:

Simplified Invoices Include:

 

E-invoice Archiving

E-invoices must be archived for a minimum of ten years.

 

 

Tax Regulations

Value Added Tax (VAT)

In France, the standard VAT rate is 20% and applies to most goods and services.

However, France also enforces reduced VAT rates:

10% rate: Applies to various items, including restaurants, hotels, and certain transport services;

5.5% rate: Applies to essential food items, books, and medical products;

2.1% rate: Applies to specific items, such as newspapers and certain pharmaceutical products.

 

Corporate Tax

The standard corporate tax rate in France is 25%. For companies with a turnover of less than €10 million that were also subject to the standard corporate tax rate in the previous fiscal year, there is a reduced tax rate of 15% on the first €42,500 of taxable income.

 

VAT on Digital Services in France

Digital services in France are generally subject to an 25% VAT. However, foreign companies selling digital services to French consumers have some extra regulations:

EU- based businesses are required to register for VAT in France or opt for the EU's One-Stop Shop (OSS) scheme, if their annual turnover from these services exceeds €10,000.

Non-EU businesses have no minimum threshold; VAT must be charged on all sales to French consumers.

B2C Transactions: The VAT must be collected at the time of sale, it must be charged on the customer's location.

Digital services that are subject to VAT include e-books, software downloads, music, movies, games, and other electronically supplied services.

 

 

Digital Reporting

Ukraine has already introduced several digital reporting requirements, with more to come:

B2G e-invoicing is required for all companies;

B2B e-invoicing will become mandatory in 2026/27;

B2C e-invoicing is voluntary;

Encouraged use of online portal (Impots.gouv.fr) for the filing of VAT Returns and for making payments.

 

VAT Registration and Thresholds

VAT registration threshold for domestically established businesses is €35,000.

For EU-based businesses engaged in distance selling of goods or services to French consumers, the threshold is €10,000.

Non-EU businesses selling into France have no VAT registration threshold; they are required to register for VAT immediately upon beginning sales of goods or services to French consumers.

 

VAT Returns and Payments

The reporting frequencies are as follows:

Monthly: Reports must be submitted by the 19th of the month following the reporting period.

Quarterly: Reports must be submitted by the 24th of the month following the quarter's end.

 

 

Penalties

Penalties for e-invoice senders, receivers, and service providers can range from €15 to €15,000 depending on the nature of the offence.

Penalties for non-compliance with digital reporting requirements vary from €250 to €15,000 per transmission.

The penalty for late payments in France is 10% of the tax due.

For late submissions, fines range from 10% to 80% of the tax due, depending on the duration and frequency of the delays.

The penalty for data protection violations is determined by factors such as the duration of the violation, its impact on affected individuals, the type and amount of data involved, and whether the infringement was intentional or due to negligence. Consequently, companies may face fines of up to €20 million or 4% of their annual worldwide turnover from the preceding financial year, whichever is greater.

 

 

Achieving Global Invoicing and Tax Compliance with Space Invoices

One way to comply with (e-)invoicing, tax, and reporting regulations in France is to use a provider like Space Invoices.

You will be able to:

Use one API for current and future global tax and invoicing compliance, including France

Save time and money with integration that takes less than a week

Support and upsell your clients worldwide, including France

Ensure all documents are archived and successfully reported to responsible institutions

Become a one-stop shop for current and future clients

Streamline processes and eliminate manual errors, saving time and money

Do you have questions about achieving compliance in France?

We are ready to help.

 

The information in this guide is strictly informative, as regulations and timelines change frequently. While we make every effort to monitor updates and maintain the accuracy of our content, we recommend consulting with a tax professional or e-invoicing specialist for the most reliable and personalized advice. This guide was last updated on November 17, 202

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