Invoicing and Tax regulation in France

France initiated the modernization of its transaction processes in 2017 by implementing mandatory B2G e-invoicing. As part of this modernization effort, France is also introducing an e-Reporting System that mandates the use of electronic invoicing between private companies and the transmission of transaction data to the administration, along with electronic reporting of VAT data. Digitalization has been successful and is scheduled to expand to mandatory B2B e-invoicing by 2026 for large and medium-sized companies, and by 2027 for small and micro companies. Despite this phased approach, many businesses have opted to transition earlier, realizing significant benefits in terms of cost savings, time efficiency, and reduced manual errors, which are particularly prevalent in tax reporting. Given the standard VAT rate in France at 20% and corporate tax rate at 25%, minimizing errors is crucial to avoid increased liabilities and penalties.

 

To ensure you’re meeting the requirements while optimizing your financial strategy, explore our comprehensive guide on (e-)invoicing, tax regulations, and digital reporting in France.

 

Invoicing Regulations in France

Invoicing regulations in France are managed and enforced by the French Directorate General of Public Finance (Direction générale des Finances publiques), with the French tax authorities playing a crucial role in overseeing compliance with electronic invoicing and VAT reporting requirements. Invoices are required for all transactions involving the sale of goods or services, applicable to both B2B and B2C dealings. Customers must receive invoices upon the delivery of goods or completion of services. For transactions where the customer is another business, invoices must be issued by the 15th day of the month following the delivery or service. Moreover, VAT-registered businesses must issue VAT invoices for all taxable sales, ensuring adherence to the regulations set forth by the French tax authorities.

At a minimum, the invoice needs to include:

Supplier Information: Full name or company name, address, and a unique identification number (such as SIREN/SIRET);

Customer Information: Full name or company name and address, VAT number, If the buyer is subject to VAT;

Unique Invoice Number;

Date of Issue: and date of sale or provision of service, if different from the invoice date;

Description of Goods or Services,

Quantities and Unit Prices: The quantity and price per unit, excluding VAT;

Total amount and Tax Details: total amount excluding VAT, VAT rates applied, if different, VAT amount payable, total amount including VAT;

Additional Information: discounts, payment terms, VAT exemption, If applicable, legal notices.

 

B2G Invoicing Specifications

For B2G transactions you have to issue e-invoices.

 

B2C Invoicing Specifications

For most B2C transactions you can issue simplified invoices, which require less information compared to full invoices.

 

Simplified Invoice

Simplified invoices can be issued for smaller transactions up to €150 including VAT. These are typically used for retail sales or services provided to non-taxable persons.

Simplified invoices need to include:

Date of Issue;

Identity of the Seller: The name and address of the seller;

Description of the Goods or Services;

Total Amount Payable: including taxes;

VAT Amount: The total amount of VAT payable.

 

Invoice Archiving

You have to archive invoices for a period of 10 years. This period starts from the end of the year in which the invoice was issued.

 

 

Mandatory Electronic Invoicing Regulations

In 2017, France implemented mandatory B2G e-invoicing. The mandate for B2B e-invoicing will extend to large and medium-sized businesses starting in September 2026, and to small businesses in September 2027. This initiative is in line with France’s transposition of Directive 55/2014/EU, which requires public entities to have the capability to receive and process electronic invoices that comply with the European standard EN-16931 and integrate with the PEPPOL network. To facilitate this, France developed a centralized platform called Chorus Pro, specifically tailored for the issuance and receipt of electronic invoices in transactions with public sector entities.

Electronic invoicing in France is also set to revolutionize the way businesses handle their invoicing and e-reporting, with the implementation of electronic invoicing bringing numerous benefits. These include improved efficiency in VAT collection, streamlined invoice processing, and enhanced invoice lifecycle management. Companies will need to manage the entire lifecycle of invoices, from issuance to payment, and ensure compliance with invoice processing statuses as mandated by the French government. This process will involve the transmission of invoice data and transaction data, highlighting the importance of invoicing and e-reporting in the new taxation model.

 

Pilot Phase

You will have the chance to participate in a pilot phase scheduled for 2024/2025, which includes working with the Public Invoicing Portal (PPF) and certified dematerialization platforms (PDPs). This initiative provides companies with the opportunity to test your invoicing system, ensuring compliance with both internal operations and French e-invoicing standards, prior to the mandatory rollout.

 

E-invoicing Process in France

Taxpayers in France are required to register on the French government’s centralized platform, Chorus Pro. This platform aids in managing tax-related activities, including the submission and receipt of electronic invoices.

The process is outlined as follows:

Upon completing a transaction: You are required to issue e-invoices through Chorus Pro immediately.

Upon submission: The Chorus Pro system reviews the electronic invoice to validate transaction details and ensure compliance with French legal and technical e-invoicing standards.

After validation: Once validated, the invoice issuer can send the invoice directly to the client, marked as compliant with French e-invoicing standards.

The customer receives the invoice: This invoice will have been validated and includes all necessary details for tax compliance.

Customers or other interested parties can verify the invoice: Verification can be done through the Chorus Pro platform, ensuring all information is accurate and up to date.

 

French Tax Authorities Responsible for E-invoicing

Responsibility for e-invoicing regulations in France falls to the Agence pour l’Informatique Financière de l’État (AIFE).

 

E-invoicing Formats

French e-invoicing formats align with the European standard EN 16931. The system for e-invoicing is managed through Chorus Pro.

E-invoicing formats commonly used in France:

UBL (Universal Business Language)	Internationally recognized standard that includes a suite of XML-based business documents specifications.
PEPPOL BIS Billing 3.0a	Internationally recognized standard, providing a unified XML-based specification for electronic billing.
Factur-X	Hybrid invoicing format that combines PDF/A-3 and XML, used widely for e-invoicing processes in France and compatible with European norms.

 

E-invoice Validating

Ensure that your e-invoices comply with the European standard EN 16931 as well as specific Dutch requirements. Further validation of e-invoices is not mandatory in France, but you can use a qualified digital certificate. If employed, the certificate must be verified to ensure that the invoice remains unaltered and originates from a trusted source.

 

E-invoice Archiving

In France, you must archive e-invoices for a minimum period of 10 years. The archiving period starts from the end of the year in which the invoice was issued. Archiving abroad is permissible under certain conditions.

 

 

Tax Regulations

The standard VAT rate in France is 20%, applicable to most goods and services. A reduced VAT rate of 10% is applied to various items, including restaurants, hotels, and certain transport services. Essential food items, books, and medical products benefit from an even lower VAT rate of 5.5%. Additionally, there is a special VAT rate of 2.1% that 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 Products

In France, digital products such as downloadable software or online services are generally subject to the standard VAT rate of 20%.

 

 

VAT Payments and Returns

In France, businesses are required to file a VAT Return with French Tax Authority to declare the VAT they have collected and the VAT they have credited for business purchases. The VAT Return should detail:

VAT collected on sales,

VAT credits for VAT paid on business purchases.

The net VAT amount, which is the difference between the VAT collected on sales and the VAT credits on purchases, is indicated on the VAT Return and must be paid to the French Tax Authority (Direction Générale des Finances Publiques, DGFIP). If the VAT credits exceed the VAT collected, the business can claim a refund.

The reporting frequencies are:

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.

The French Tax Authority encourages the electronic filing of VAT Returns and Payments through its online portal (Impots.gouv.fr).

 

VAT Registration 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 Frenchconsumers.

 

 

E-invoice Requirements

In France, e-invoice requirements adhere to EU standards, necessitating components such as:

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 of the payment terms, including due date and payment method;

Tax Point Date: If different from the invoice date, the date on which the taxable supply was made or completed;

Reference number for tracking;

Electronic signature or other means of ensuring authenticity and integrity.

For businesses with repeating customers, setting up recurring invoices can streamline the billing process by automating regular, automatic payments.

 

Utilizing invoicing software can significantly benefit businesses in creating, sending, and managing e-invoices in compliance with French regulations. These tools not only help in generating professional invoices but also in streamlining the invoicing process, improving cash flow, and ensuring that payments are received on time.

See how Space Invoices can help.

 

B2G E-invoice Specifications

B2G e-invoicing is mandatory. It is the most regulated sector, complying with the EU directive 2014/55/EU and demanding submission of invoices through Chorus Pro.

 

B2C E-invoice Specifications

For most B2C transactions you can issue simplified invoices, which require less information compared to full invoices.

 

Simplified E-invoice Requirements

You can issue simplified e-invoices for transactions where the total invoice amount, including VAT, does not exceed €150.

Simplified e-invoices include:

Date of issue;

Unique invoice number;

Supplier identification: The name and address. The VAT number is required if the total amount of the invoice, including VAT, is above €100;

Type of goods or services;

Total amount and VAT: The total amount payable and the VAT amount, with a simplified breakdown or a statement that VAT is included if applicable.

 

 

Digital Reporting R

In France, businesses registered for VAT must electronically file a VAT Return through the portal of the French Public Finances General Directorate (DGFiP), via business software that enables this functionality, or through a tax representative. This filing includes details on the VAT collected and paid.

While real-time reporting is not currently mandatory, it will become a requirement once e-invoicing is implemented. At that point, businesses will need to provide real-time transactional data to the tax authorities.

 

Fichier des Écritures Comptables (FEC)

Since 2014, all businesses in France are required to produce and submit a specific file during tax audits. This file must include detailed information about all accounting entries, such as the date, account number, account description, and amount.

 

SAF-T

SAF-T is not yet mandatory in France.

 

Data Breaches

In France, if a data breach occurs, you are obligated to inform the French Data Protection Authority (CNIL) within 72 hours of becoming aware of the incident. If the breach is likely to pose a high risk to individuals' rights and freedoms, affected individuals must be notified without undue delay.

 

 

Penalties

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

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

 

Tax Penalties

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.

 

Data Breaching Penalties

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.

 

 

Streamline Global Invoicing and Digital Reporting with Space Invoices

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

You will be able to:

Utilize a single API for current and future worldwide compliance, including in France

Support and upsell your clients globally, including in France

Become the one-stop shop for current and future clients

Streamline processes to save time and reduce costs, while also eliminating manual errors

Rest assured all documents are properly archived and reported to the relevant authorities

Achieve rapid integration, typically completed in less than a week.

 

Having questions about how to achieve compliance in France?

We are here to assist.

 

 

This guide is provided by Space Invoices and does not constitute professional tax advice or opinions tailored to the specifics of any particular business or situation. Space Invoices does not accept responsibility for the accuracy or applicability of the content within this guide. Tax regulations, e-invoicing requirements, and digital reporting standards are subject to frequent changes and complex interpretations that require validation by qualified tax professionals. It is the user's responsibility to evaluate the relevance and accuracy of the information provided and to consult appropriate professionals. Space Invoices does not offer professional tax opinions or advice through this publication.

Looking to automate real-time reporting and tax compliance for France? Let's talk