Note: The Finance Law for 2024 has been officially adopted and published in the Official Gazette on 30 December 2023. Our blog, France: B2B E-Invoicing Mandate Postponed, is promptly updated whenever there are changes to the rollout of the French mandate.
France will implement a mandatory B2B e-invoicing and an e-reporting obligation. Every company operating in France is affected.
Electronic invoicing in France requires using a (partner) dematerialization platform. The already enacted legislation leaves the choice of which platform up to companies.
Should you use the public platform (‘PPF – Portail Public de Facturation’, i.e. Public Invoicing Portal) or a third-party private platform (‘PDP – Plateforme de Dématérialisation Partenaire’, i.e. Partner Dematerialization Platform)? And which organisation registered as a PDP should you opt for?
There is a lot to consider – including the type of invoices, data management, customer/supplier relations, transmission, functionalities, and more – this blog will help you make a decision.
The electronic invoicing process includes formatting, controlling, reporting, routing tracking, transactions, whether between trading parties (domestic B2B e-invoices) or with the PPF (domestic B2B e-invoices, cross-border B2B sales and purchases, B2C sales, payments received on services). In this respect, PDPs are essential.
French legislation allows companies to choose their dematerialization platform for submitting and/or receiving domestic B2B invoices and reporting transactions. A public solution exists, the PPF, alongside which other PDPs position themselves.
What parameters should you consider when choosing a dematerialization platform? What are the conditions for becoming a PDP and when will they be operational?
This blog discusses the elements that enable companies to understand the role of dematerialization platforms in managing electronic invoicing. If you wonder how to choose the right PDP for your organization, read this blog about Choosing the right PDP – 5 Questions to ask Yourself.
1. Understanding the role of dematerialization platforms
The need to use a dematerialization platform is part of the electronic invoicing requirements, which come into force for business-to-business (B2B) transactions with go-live of the mandate.
Electronic invoicing in France: who is affected?
- Mandatory electronic invoicing requirements are being implemented progressively according to company size.
- They also entail the need to exchange B2B invoices via a platform. The public platform PPF and PDP will allow these exchanges.
- October 2023: draft of new Finance Law for 2024 with details of changes, including any revisions to the timeline for when each category of company will be in scope
- End of 2023: new Finance Law for 2024 formally enacted by French Parliament
- From April onward 2024: Initial list of officially registered PDPs published
- 2025: Pilot phase ongoing during most of the year
- Early September 2026: first phase of mandate go-live expected
- Inbound e-invoicing INBOUND for all companies. Outbound e-invoicingOUTBOUND (+ e-reporting) for Large & Mid-Size businesses Caps
- September 2027: second phase of mandate
- Outbound e-invoicing OUTBOUND (+e-reporting) for any other companies
2. PDPs and electronic invoice formats
An electronic invoice must be delivered in a structured format, leaving it to the trading parties and their PDPs to agree on the standard. By default, PDPs must be able to process the three core set formats, UBL, CII, or UNCEFACT, with the obligation for the platforms to produce a legible version of each invoice, or Factur-X hybrid format (XML+PDF/A-3).
PDPs may also offer to process any other structured formats (e.g. EDI formats such as EDIFACT), subject to acceptance by both the buyer and the seller. In both cases, PDPs will have to extract mandatory data from the issued e-invoice and map it into one of the core set formats – and then report them to the PPF within 24 hours of the e-invoice issuance.
The corresponding flows can be exchanged under various communication protocols (EDI, API, etc.)
3. Public platform or PDP?
Using a PDP isn’t mandatory from a legal point of view. However, using a PDP will be necessary for companies who want to exchange invoices in specific formats due to the specificities of the invoice flow (not supported by the PPF).
The role of the public platform
The PPF will be used for the obligatory transmission of invoice data to the tax authorities.
It will manage the following for companies:
- Submission of invoices (in simple PDF format).
- Invoice entry to the portal.
- Invoice conversion into one of the three formats (CII, UBL, or Factur-X).
- Invoice availability to recipients.
The PPF performs other functions including management of the Central Directory (in which any registered company subject to VAT will be identified), data collection and transmission to the tax authorities, and retention of e-invoices.
The advantages of Partner Dematerialization Platforms (PDPs)
Like the PPF, a Partner Dematerialization Platform (PDP) ensures the submission of invoices and conversion into one of the three core-set formats – CII, UBL or Factur-X.
But, contrary to the PPF, they will allow the exchange of invoices in any EDI format (other than the three core-set formats).
The PDPs will allow the following:
- The creation and control of invoices (in terms of tax and accounting compliance) and their validation (technical and consistency).
- Sending invoices from suppliers to buyers/recipients and thus transmitting invoices regardless of the platform chosen by the recipients.
- Receiving invoices sent by other platforms and making these invoices available to users
- Processing the four invoice lifecycle statuses (deposit, rejection, refusal, and cashed).
- Transmitting invoice data, transactions and payments to the public platform.
In addition to these mandatory functionalities, they may also offer the following:
- Archiving tools in a digital vault with various functionalities, centralization, and collection.
- As well as the PPF, the PDPs must process non-mandatory lifecycle invoice statuses such as notifications of delays, reminders, split payments, and so on.
- Specific business applications like presence/consistency controls of business data and approval workflow.
4. Conditions to become a PDP
A PDP is a platform registered and authorised by the French tax authorities. The official registration number will be issued based on an application file submitted by an operator. This file will have to document how the regulation requirements (decree and order published in October 2022) are met, particularly the ability to perform the functions expected of a PDP. These requirements are meant to be slightly revisited with a new decree/order to be published beginning of 2024 (more precisely, with the removal of connectivity tests with TA Platform as a PDP Registration Criteria)
In addition to the guarantee provided by this registration (mainly from the point of view of compliance with stringent security rules), what distinguishes a registered platform from a simple dematerialization operator is the possibility of transmitting invoices to other dematerialization platforms (PPF or other PDPs).
This registration is valid for three years and then must be renewed, based on audits to be regularly provided by the PDPs (first audit to be conducted no later than 12 months after the registration entering into force).
The first certified PDPs should be announced in the beginning of 2024 and will be published on the tax authority’s website.
Find out how Sovos can help you comply with e-invoicing regulations by speaking with one of our experts.
