Taxpayers are now allowed to prove expense receipts using a computerized version of the receipts for purposes of determining the tax base for tax and social security contributions, as of 1 July 2019.
Since 30 March 2017, all paper invoices issued or received could be destroyed after scanning (under strict conditions) according to a provision of the tax law. However, the rules for retaining receipts of expenses required that taxpayers retain a hardcopy of the receipt for certain purposes. A failure to retain these hardcopies could be subject to tax and social liability reassessments. In particular, during a social security audit, inspectors could request a hardcopy of the expense receipts.
With a May 2019 decree, the rules for supporting documents required to establish the base of the social security contributions may be kept in computerized format effective 1 July 2019.
The digitalization format rules are described in Article A.102 B-2 of the tax procedures law (LPF), and clarify that the following principles must be applied:
The rules under the decree allow companies to set up solutions for digitizing expense reports, without having to keep paper documents.
Particular attention must be paid to the quality of digitization because the conditions (described above) are very strict and not all currently available solutions meet these criteria. Thus, a company that asks its employees simply to take a picture or image of their expense receipts would not meet the conditions of Article A 102 B-2 of the LPF and would have to continue to keep paper documents.
Companies may want to consider conducting a diagnostic evaluation of their current practice as well as how to implement the new rules.
For more information, contact a tax professional with KPMG Avocats in France:
Laurent Chetcuti | + 33 1 55 68 48 87 | firstname.lastname@example.org
Armelle Courtois-Finaz | + 33 1 55 68 49 43 | email@example.com
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