The French finance bill project (published 27 September 2019) reflects the French government’s intention to make electronic invoices in business-to-business (B2B) relationships mandatory, effective January 2023. Under this proposal, paper (hardcopy) invoices would no longer be acceptable as of 2023.
This proposal would have implications for value added tax (VAT) purposes.
In 2015, the French government attempted to require electronic invoicing of B2B transactions; however, this plan was not successful because of the 2006/112 EU Directive that provides a customer must grant its approval before being invoiced electronically.
In the meantime, the Italian government obtained an “exceptional derogation” from the requirement for customer assent prior to electronic invoicing, and has implemented a rule for mandatory electronic invoicing between companies. Read TaxNewsFlash
French government officials have expressed their belief that France would be able to obtain a similar derogation because the purpose is to address VAT fraud.
Proposal in France
The French government plans to implement a system whereby:
The French government’s proposal is viewed as being ambitious, and it confirms that new VAT legislative projects are becoming more and more data driven—in that the tax authorities want to have access to “best practices” implemented by other EU Members States, including mandatory B2B electronic invoicing, automatic upload of the VAT data to the tax administrations, and data mining.
Companies need to consider how to prepare for the mandatory electronic invoicing rules including considering how they can improve their tax data quality and strengthen their VAT controls (notably in the framework of a reliable audit trail). Practically speaking, companies need to pay attention to the requirements of an e-invoicing solution and how to customize such a system to comply with the proposed changes in 2023.
For more information, contact a tax professional with KPMG Avocats, a KPMG member firm in France:
Laurent Chetcuti | + 33 1 55 68 48 87 | email@example.com
Armelle Courtois-Finaz | + 33 1 55 68 49 43 | firstname.lastname@example.org
The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.