Mandatory electronic invoices: what it will mean for you

Electronic invoices are to become mandatory in France, although the French government is yet to disclose when exactly this will happen. 

The measure was due to enter into force on July 1, 2024 but in the summer of 2023 it was announced the launch would be postponed, with more details to follow in a forthcoming finance law. This obligation, once it does arrive, is expected to be progressively rolled out to all companies and apply to all professional transactions. Even if there's a question mark over the date, companies can start preparing now and this article is here to help with that.

What’s an electronic invoice (link in French)? What criteria must it meet to comply with legal requirements? And, in concrete terms, what will this mean for you?

Let’s cover all you need to know on the topic to be ready when the time comes.

According to the general tax code (Code général des Impôts), an electronic invoice is “an invoice that was issued, transmitted or received in a digital format, and which, necessarily, includes a minimum amount of structured data.”

This structured dataset allows you to tell an electronic invoice apart from a simple digital or dematerialized invoice. It’s a specific format that guarantees the identity of the issuer and the accuracy of the information it holds.

Subsequently, an e-invoice is very secure: there’s virtually no risk that an ill-intended person will modify its content after it has been sent and signed.

Since the 13 March 2000 law, a digital document has the same legal value as a paper document. It has what is called probative value. In other words, it can be, for instance, used as evidence in the case of a dispute.

For a paperless invoice to be legally compliant and considered to have probative value, it must meet specific criteria: you must be able to guarantee its integrity, legibility, and authenticity.

• Integrity: it must be impossible to modify or tamper with the document.
• Authenticity: the invoice’s data, as well as the identity of its issuer must be certified.
• Legibility: the invoice must be in a format that is readable at any given time, by any system, and by humans themselves.
  
  

Following these three criteria, only two types of electronic invoices meet the legal requirements.

• The “structured format” invoice or EDI (Echanges de Données Informatisées) invoice. This type of invoice is based on encryption technology. For clarity’s sake, we won’t go into the technical details of how it works. But to define it as simply as possible, it involves transmitting invoicing data from one management system to the next in a specific format: the EDI format. This format is both standardized and secure. It is probably the most sophisticated electronic invoicing process currently available. That being said, it is also quite demanding to set up and expensive. It is, therefore, primarily used by large companies.
• The “hybrid” invoice or “mixed format” invoice. This type of invoice looks like a classic PDF format invoice. However, there is a significant difference: this kind of invoice includes a structured data file (for example, an XML file) containing all the essential invoicing information (namely, date and invoice reference, the supplier and buyer’s identity and contact information, total amount without and with tax…). In that way, the data it contains is guaranteed to be legible, authentic, and sound.

To meet the tax administration’s newest requirements, of course. But that’s not all. Electronic invoices have a lot of things going for them as well. Let’s focus on some of their advantages.

• Cost-effective

No more having to fuss with stationery, printing, and sending costs. By going digital, companies can make considerable savings.

• Time-saving

Managing supplier and client invoices is a time-consuming process. With digital invoices, documents are issued and sent out in a matter of minutes. The receiver no longer has to wait several days for their invoice to come in. This helps reduce payment times.

• Simplified filing and archiving

No more having to keep paper documents in large binders. Supplier and client invoices can be stored in secure databases you can access with an internet connection. You can also easily digitize receipts and expense reports.

• More ecological

Electronic invoices are often seen as a more ecological alternative. Sure, sending an email and downloading an attachment generates CO2 emissions. But contrast that footprint with the fact that producing a single sheet of A4 paper requires close to 10 liters of water and that the paper and pulp sector is the fifth most energy-hungry industry in the world.

Electronic invoices aren’t totally new. Several legal rules governing e-invoices have already been in place for some years.

In that regard, companies providing a service to the State, a local authority, or any other public institution already have to issue electronic invoices. This mandate applies to all companies, including micro-enterprises.

The invoices are transmitted via a platform created especially for this by the State, Chorus Pro. Close to 140 million documents have been exchanged on the platform since 2017.

The new law will expand to a wider audience, requiring all companies to submit electronic invoices for all business transactions.

This mandate has three objectives:

• simplify daily life for businesses by reducing their administrative load;
• improve fraud detection;
• simplify VAT declarations and accounting (link in French).

Once the new law comes into force, e-invoicing will become the norm and no longer be just for interactions between companies and the State or local authorities. All transactions between professionals will be mandatorily subject to electronic invoicing.

This means, in theory, that this will affect all companies - regardless of their size or field of activity.

1. The new law only applies to B2B transactions, i.e. transactions with other companies. For the time being, B2C transactions aren’t affected by the law.
2. The transaction must be carried out on French national soil.
3. The company must be subject to VAT.

The law requires including new legal mentions on e-invoices. These mentions are:

• the buyer’s SIREN number;
• the transaction type: companies will need to specify whether it’s for shipping goods or a service;
• the shipping address or address of where the service was rendered.

The most significant change of the new regulation will require companies to adapt how they manage invoices. For example, it will be mandatory to receive and send invoices via a digital platform. 

Businesses have two choices:

• Use a digital platform that's partnered with and approved by the tax authorities (such as PDP). This platform will handle turning the PDF invoice into a legally-compliant format.
• Sign up for the Chorus Pro invoicing portal (PPF), currently used for all business transactions with the French State or local authorities.
  
  

Companies will only be able to go through the digital platforms approved by the tax authorities to send their invoices.

You’re now up to speed on all the information you need to prepare for the new e-invoicing mandate.

Qonto is already in the process of adapting its current invoicing solution so that it complies with the reform when it is introduced. As an active member of the National Electronic Billing Forum (Forum National de la Facture Électronique) and by participating in the working groups organized by the General Directorate of Public Finances (Direction Générale des Finances Publiques or DGFiP), we're staying on top of all the latest developments related to the reform.

We’ll keep you updated you on the finer details of the changes that this new legislation entails. And, of course, we’ll present the best-in-class solutions to help you and your business adapt with ease.

If you’re searching for a business account that's both 100% online and fully customizable, look no further than Qonto. Simplify your invoice management and get equipped with the tools you need to stay ahead of the new legislation on electronic invoicing.