How Do Changes to the French e-Invoicing Mandate Impact My Business?

Christiaan Van Der Valk
October 16, 2024

This blog was last updated on October 22, 2024

The French tax administration has just announced structural changes to the 2026 French e-invoicing mandate that will discontinue the development of the free state-operated invoice exchange service. This decision will put increased pressure on taxpayers and software vendors to select a certified ‘PDP’ to fill the void created by this decision. 

French e-invoicing mandate: A complex scheme, years in the making 

When France introduced mandatory business-to-business e-invoicing in its 2020 Finance Law, the tax administration conducted a broad comparative study of how other countries had implemented similar obligations. However, France adopted a unique approach, creating the complex ‘Y model,’ which combined elements from several countries’ systems. Like Italy for example, it included a central state-operated platform (the ‘PPF’) that businesses could use as a free, basic service for the exchange and reporting of e-invoices.  

Division of labor between PDPs and the PPF in the original ‘Y-scheme’ design 

In parallel with the PPF’s own ability to exchange e-invoices for French taxpayer, the French tax authority solicited candidate PDPs to perform the same function for more complex business use cases.  

These organizations were registered, put through vigorous testing and some were pre-approved, pending final testing with the PPF. PDPs are designed to seamlessly exchange invoices with each other and are required to report these transactions to the PPF.  

And as it turned out, many companies in the French market decided to use a PDP to organize the exchange of invoice data with trading partners in a way that fits their unique business circumstances. Other French businesses counted on the availability of the free-of-charge PDP services to be provided by PPF, rather than selecting a private PDP.  

The overall architecture of data flows between the public and private entities involved in the French scheme led to unprecedented complexity in the technical specifications released by the public administration. It has been clear for some time that this complexity was putting strain of budgets and timelines for the technical development of the PPF by the French public administration.

How does the PPF’s scope change impact businesses that were relying on the free PFF? 

The French tax administration (DG-FIP) announced on 15 October that while the development of the PPF will continue, its focus will shift to providing directory services for routing e-invoices, without offering PDP services.  

As a result, many French businesses and software vendors now face the challenge of securing the services of a private PDP. Although the e-invoicing mandate’s go-live date on September 2026, initially applies only to the largest businesses, more than four million companies will have to rely on PDP-enabled accounting software to receive those transactions regardless of their size. 

Take Action 

Sovos was one of the first PDPs to be pre-authorized by the French tax authority and brings more than two decades of experience providing compliance technology for businesses in France. Sovos is uniquely positioned to meet the needs of companies that must now choose a reliable provider. 

Learn how Sovos can help your business 

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Author

Christiaan Van Der Valk

Christiaan Van Der Valk is vice president, strategy. Elected a World Economic Forum Global Leader for Tomorrow in 2000, Christiaan is an internationally recognized voice on e-business strategy, law, policy, best practice and commercial issues. Formerly co-founder and president of Trustweaver (acquired by Sovos), Christiaan also holds long-standing leadership roles at the International Chamber of Commerce (ICC) and the European E-invoicing Service Providers Association (EESPA). Over the past 20 years, he has presented at and authored key papers for international meetings at the Organisation for Economic Cooperation and Development (OECD), the Asia Europe Meeting, World Trade Organization and several other UN agencies. Christiaan earned his Master of Laws degree from Erasmus Universiteit Rotterdam.
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