France, One of the EU's Largest Economies, introduces Continuous Transaction Controls

France e-Invoicing

France, one of the EU’s largest economies, is introducing Continuous Transaction Controls (CTCs) by implementing a B2B e-invoice clearance and e-reporting obligation, to be rolled out from 2023. 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.

The basis of the French proposal is that 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 tax authority with data relating to any domestic B2B transaction.

In order to effectively be able to 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 e-invoice clearance process – notably B2C invoices and cross-border invoices that will not be subject to a domestic French mandate, as well as certain payment data – will be subject to the complementary e-reporting obligation.

So the tax authority will receive all data relating to B2C and B2B transactions (including certain payment data) by these two measures: the e-invoice clearance mandate combined with the e-reporting obligation.

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Mandate quick facts

  • The proposed requirements will be implemented in the country during the years 2023-2025.
  • The e-invoice clearance process will be based on a model of certified service providers connecting taxpayers to a centralized platform.
  • 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 financial software that is used by the supplier. Small companies without accounting software will be required to report less details than a corporation equipped with an ERP or billing software.
  • Payment status data relating to each invoice would be provided by both the buyer (payment sent) and the supplier (payment received).

Mandate rollout dates

  • 1 January 2023: Large companies will be subject to the B2B e-invoice clearance and e-reporting mandate. B2C and cross-border invoices won’t need to be cleared but will need to be reported so the tax administration has full visibility. All companies will be mandated to accept e-invoices.

  • 1 January 2024: Obligations will apply for medium-sized companies.

  • 1 January 2025: The smallest companies will enter into scope All companies will be in scope of the mandate by 1 January 2025.

How Sovos can help

Sovos serves as a true one-stop-shop for managing all e-invoicing compliance obligations in France and across the globe. Sovos uniquely combines local excellence with a seamless, global customer experience.