France, like many other countries across the world, is in the process of implementing new requirements with regard to e-invoicing for transactions on VAT. The country also has new legal invoice requirements that entities need to note.
Before we look into these, let’s see what an invoice is and what information it needs to contain to comply with the French tax code.
The invoice is a type of receipt which is provided at the end of a transaction as proof. The invoices are provided during the sales and purchase of goods and services. Invoice is considered of great importance as it contains information that might be required by law later, especially with respect to commercial rules and regulations. The invoice is also considered as the documentation which might serve in filing taxes and support the duties of VAT. The invoice must have all the information which is mentioned in the tax law.
- Information Required for Invoices in France
- When Invoices are Addressed to Professionals
- Special Information
- New legal requirements for invoicing in France
- E-Invoicing for VAT in France
Information Required for Invoices in France
The following is mandatory information that an invoice must-have.
- The date on which invoice is issued.
- An invoice number is a unique number in chronological order without any breaks. There can be separate series for different invoices.
- The invoice must have the date on which service is provided to the client.
- The invoice must-have information on the buyer i.e. name, company, address of office or home, and phone number, etc.
- The invoice must also have identifiable information of the service provider or sellers such as the first and last name of the owner, the full name of business or services, name of the company, RCS number (unique for every merchant), address of the company, or business, RM and Siren number, the official address of the office which is registered, and legal information such as SAS, SNC, Sa, SARL, and EURL, etc.
- The VAT number of the individuals i.e. buyer and seller. However, the invoices with less than 150 Euros VAT information is not required.
- The complete designation of service or product such as reference, brand, and nature, etc. In the case of services, complete breakdown information of labor and materials.
- Account details of either service provided or products sold.
- The price of the catalog.
- Anticipated hike in price for products or services.
- The applicable rate of VAT.
- Total VAT amount. In case different VAT rates are applied then corresponding rates must be mentioned.
- Discount rates if applicable.
- The total amount paid to merchant or seller excluding tax e.g. VAT as well total amount with taxes.
When Invoices are Addressed to Professionals
In cases when the invoices are addressed to certain professionals, then it must comprise of the following information.
- Time and date information i.e. the date on which specific settlement is taking place, discount rates if applicable, and if there is no discount then it must also be mentioned on the invoice.
- Rates of penalty in case of delays.
- In case of a late payment guarantee of 40 Euros is to be mentioned on the invoice.
There is some additional information required to be mentioned on invoices in France in case of special mentions.
- Payments through cheque are accepted in case of approved association’s members e.g. the vendor is a member of any approved associated or management center.
- In cases such as when a service provider or seller is having benefits of franchises which are VAT based then VAT is not to be applied to it under article 293B of CGI.
- In case of auto-liquidation clearly stating that the amount is non-taxable.
New legal requirements for invoicing in France
There are new legal requirements regarding invoicing in France, which were put in place to remove delays associated with the processing of invoices and with payments. The amended section of the commercial code applies to the content of Article L. 441-9.
Per the new requirements, all invoices have to adhere to the following:
1. Address: if the invoicing address and regular address are different, the parties involved need to indicate both addresses on the invoice.
2. Purchase order number: any PO number a buyer issued must appear on the invoice.
Failure to comply with the modified requirements attracts an administrative penalty. Legal entities that do not comply will face a penalty of up to €70,000.
Additionally, every non-compliance issue is penalized 15 Euros for each obligatory information that is not included. The same applies to inaccurate statements and the total fine will not exceed 1/4 of the invoice amount.
E-Invoicing for VAT in France
In France, the authorities hope adopting mandatory e-invoicing for value-added tax transactions (VAT) will help combat tax evasion. The e-invoice measures are for taxable entities subject to value-added tax, with standardization and modernization of the process the main reason apart from the need to control tax fraud.
Law No. 2019-1479 the National Assembly adopted on December 28, 2019, under Article 153 of the Finance Act 2020 stipulates that all invoice transactions subject to VAT must be issued electronically. The law also requires that parties transmit these e-invoices to the tax administration.
E-invoicing in France is likely to follow the gradual roll-out plan adopted elsewhere and which follows the EU’s VAT Directive 2006/112/EC and e-invoicing Directive 2014/55/EU.
Per the VAT Directive, every taxable person has the legal obligation of ensuring invoice authenticity and integrity. The new e-invoice guidelines seek to enhance these principles by making it possible for the use of advanced electronic signatures. With the new e-invoicing measures, all entities will be obligated to guarantee the above concerns.
The timeline for the adoption of obligatory e-invoicing in France forecasts the earliest date of implementation as of January 1, 2023. In case of delays, the implementation date will not be later than January 1, 2025.