France, One of the EU's Largest Economies, introduces Continuous Transaction Controls
France E-Invoicing from 2024
France is introducing continuous transaction controls (CTCs). From July 2024 to January 2026, France will implement mandatory B2B e-invoicing via a central platform and connected service providers as well as a complementary e-reporting obligation. With these comprehensive requirements, alongside the B2G e-invoicing obligation that is already mandatory, the government aims to increase efficiency, cut costs, and fight fraud.
All B2B invoices will be transmitted through a central platform, or via certified service providers connected to that central platform. This e-invoice clearance will lay the foundation and provide the French tax authority with data relating to any domestic B2B transaction.
To effectively combat fraud, the tax authority will need access to more transaction data. Therefore, data that the tax authority will not receive as part of the mandatory e-invoicing process will be subject to the complementary e-reporting obligation, e.g., B2C invoices and cross-border invoices, as well as certain payment data.
So the tax authority will receive B2B and B2C transaction data (including certain payment data) by two measures; the e-invoicing mandate combined with the e-reporting obligation.
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France B2B e-invoicing quick facts
- The proposed requirements come into effect during the years 2024-2026.
- The e-invoice mandate will be based on a model of certified service providers connecting taxpayers to a centralized platform (Chorus Pro), with an option for taxpayers to connect directly to Chorus Pro.
- E-invoicing standard format is the Factur-X, a hybrid structure that allows both XML and PDF submissions.
- For e-invoices, all existing tax mandatory fields as well as those required by commercial laws will have to be issued, including item-line details. The operation type (goods, services, mixed) and the VAT payment option will also be mentioned in the invoice. Both structured and hybrid (image + structured data) formats will be accepted, but the allowed formats are not yet defined.
- For e-reporting, the level of detail will be dependent on the type of transaction and the financial software used by the supplier. Small companies without accounting software will report less details than a corporation equipped with an ERP or billing software.
- Payment status data for each service invoice.
French e-invoice & e-reporting rollout dates
- July 2024: All companies, irrespective of size, must accept to receive e-invoices under the new rules. The largest 300 companies will be subject to the B2B e-invoice issuance mandate and wider e-reporting mandate. The e-invoicing mandate does not apply to B2C and cross-border invoices. However, there is an obligation to report those transactions so the tax administration has full visibility.
- January 2025: Obligations will apply to a further 8,000 medium-sized companies.
- January 2026: All remaining medium and small companies will be in scope of the mandate.