Abandon of the PPF: 5 Major Impacts on France’s Tax Reform
On October 15, the French tax administration officially announced the partial abandonment of the PPF (Public Billing Portal), a decision…
Simultaneous implementation of the SOLOCHAIN Warehouse Management System (WMS) in 5 distribution centers View the press release
Since January 1, 2020, all French companies have been under the obligation to send their invoices to public entities in electronic format, via the platform Chorus Pro. Initially confined to B2G (business to government) B2B electronic invoicing: what are the obligations for 2023?exchanges only, this provision is now in the process of being imposed on B2B (business-to-business) exchanges as well.
3 billion This is the number of B2B invoices published each year in France, as an indication of the enormously high stakes concerning the successful dematerialization of invoices.1
Through its Article 153, the 2020 Finance Law indeed introduces this new obligation for electronic invoicing for all B2B exchanges subject to VAT. This will also be accompanied by the obligation of e-reporting, requiring the additional transmission of data in order to allow the administration to monitor the transactions carried out. Although the outlines of this reform may still be changed, particularly within the framework of the ongoing consultations, the roll-out of this obligation will probably be carried out in 3 stages:
After Italy and Portugal, France alsoplans to become the third country in the European Union to generalize B2B electronic invoicing. This change also echoes the expected future changes to harmonize VAT practices across the continent, such as the eIDAS Regulation which will be applied to data filing and electronic identification.
Faced with the high stakes represented by the transition to electronic invoicing, the General Directorate of Public Finances (DGFiP) issued a report on the subject last October, entitled VAT in the digital age in France. Based in particular on the results of a first experiment carried out in 2020, via a B2B portal similar to Chorus Pro, the document first details the 4 main objectives of the reform:
In this report, the DGFiP also highlights a major problem: the obligation of electronic invoicing will not be sufficient to achieve the 4 objectives mentioned above. Why is this the case? Quite simply because the information included in invoices does not in itself make it possible to have a global view of the situation of a company in terms of VAT payments. This is why electronic invoicing will potentially need to be supplemented by a mandatory transmission of additional data, also called e-reporting. It is envisaged that this will focus on the following elements:
For companies subject to VAT, the switch to electronic invoicing is a major challenge, especially since most do not have the resources to introduce it and the framework for the reform is still unclear. Be that as it may, for professionals, it is important to focus now on two facets that will be essential for updating the invoicing function: architecture and format.
1 million This is the number of French companies which, according to their own estimates, will not be ready on January 1, 2023.4
The architecture chosen for the implementation of electronic invoicing will probably be based on the model currently in place in Mexico, providing for an extension of Chorus Pro in order to collect data from e-reporting. In this configuration, companies would have three possible options for transmitting their invoices:
The format of invoices also deserves all the attention of companies, especially since they will all be required to receive them in electronic format from 2023 onward. Although many questions are still pending (conversion issues, the qualities required of the original invoice, the conditions for the obligation of readability, etc.), the DGFiP report suggests that professionals will have the choice between three different formats:
Becoming progressively compulsory between 2023 and 2025, B2B electronic invoicing will be an obligation for all companies, especially since it seems clear that it will also be extended to B2C in the medium term. Although the procedures are still subject to further modification in the months to come, it is vital to tackle the issue immediately, as the deadlines are short and the changes required are enormous.
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