The generalization of electronic invoices will come into force gradually from 2024. “The island’s 275 accountants will work alongside businesses in the coming months to initiate this new digital shift”, ad Kathy Hoarau, President of the Regional Chamber of the Order of Chartered Accountants, which specifies the contours and conditions of application of this measure.
Meeting Leader : The amending finance law for 2022 confirmed the generalization of electronic invoicing between subject companies. What exactly is an “electronic invoice”? ?
Kathy Hoarau : An electronic invoice is an invoice issued, transmitted and received in dematerialized form. It will be sent to the customer via a dematerialization platform, whether it is the public dematerialization portal or another dematerialization platform. The term “e-invoicing” is used to designate electronic invoicing. This concerns all purchases and sales of goods and services carried out between companies established in France which are subject to VAT., when it comes to so-called domestic operations, that is to say concerning the national territory. This type of transaction is called “business to business” (or B to B). On the other hand, Transactions benefiting from a VAT exemption pursuant to the provisions of Articles 261 to 261 E of the General Tax Code are not subject to the electronic invoicing obligation., and as such exempt from invoicing. This concerns in particular services provided in the field of health (article article 261-4-1°), education and training services (article 261-4-4°), real estate operations (article 261-5), operations carried out by non-profit associations article 261,7, banking and financial operations and insurance and reinsurance operations (article 261-C). What you need to know is that since January 1, 2020, all French companies are required to send their invoices to the public sector in electronic format. All of these invoices pass through Chorus Pro. According to the tax administration, almost 140 million invoices have been exchanged since 2017.
What is “e-reporting”? ?
“E-reporting” is the transmission of certain information to the administration (For example, the amount of the transaction, the amount of VAT charged, etc.) relating to commercial operations which are not affected by electronic invoicing. These are sales and service provision operations with individuals (ou transactions « business to consumer », B to C, like retail) or transactions with operators established abroad (exports, intra-community deliveries…). “E-reporting” makes it possible to reconstruct the overall economic activity of a company : complementary to electronic invoicing, it will allow, eventually, to offer businesses pre-filling of their VAT returns.
How will the dematerialization of invoices help combat VAT fraud? ?
The combination of electronic invoicing and the transmission of additional data will provide the tax administration with knowledge of all commercial operations carried out by companies subject to VAT.. It will allow cross-checking between purchases and sales and, Thus, to better fight against tax fraud, while making it possible to pre-fill VAT declarations later. For B to C operations, it will make it possible to understand the problem of distance sales.
Is electronic invoicing beneficial for businesses? ?
Four objectives are targeted by the law establishing the electronic invoicing obligation. First, strengthen the competitiveness of businesses by reducing the administrative burden of incorporation, sending and processing invoices in paper format, as well as thanks to the security of commercial relations. Secondly, fight against tax fraud and reduce the VAT gap through automated cross-checking. Thirdly, enable ongoing knowledge of business activity in order to promote finer management of government actions in terms of economic policy. Fourth, facilitate, eventually, VAT declarations by pre-filling.
What is the timetable for the implementation of this measure? ?
Implementation of electronic invoicing and transmission of transaction data to the administration (« e-reporting ») will intervene gradually, according to the timetable provided for by Ordinance No. 2021-1190 of September 15, 2021. Electronic invoicing and e-reporting obligations will be deployed in three stages, and according to the criterion of company size. The mandatory issuance of invoices in electronic format and the obligation to transmit information and payment data will be mandatory from July 1, 2024 for large companies, from January 1, 2025 for mid-sized establishments and from January 1, 2026 for small and medium-sized businesses. The obligation to receive invoices in electronic format will be mandatory, as for her, from July 1, 2024 for all companies, whatever their size, since their supplier will be required to issue in an electronic format.
What should companies do to prepare for this digital shift? ?
Companies will have to adapt their procedures and information systems, but also train their human resources. Electronic invoicing will lead to a change in current invoicing habits. This change will be all the more important for companies that, still today, are not equipped with invoicing software and use billers.
How are accountants preparing for this change ?
Accountants are at the heart of this change. On a national level, the order of chartered accountants actively participates with the government in the development of specifications for electronic invoices. At the regional level, the order of chartered accountants organizes training sessions for accounting professionals on this subject. In the meeting, more than 50 accountants have already been trained. Accountants will be able to support companies on all aspects of the implementation of electronic invoices : training of managers and their staff, help in choosing IT solutions, the development of invoicing procedures in accordance with the requirements of electronic invoicing.
