Legislation enacted in late 2012 (referred to in English as the “third amended Finance Act for 2012”) advanced measures to update and modify the French indirect tax rules by transposing into French tax law the invoicing rules under EU Directive 2010/45.
These measures reflect the general trend that financial and management data are now maintained in an electronic format.
The 2012 legislation (with an effective date of 1 January 2013) also liberalized the conditions governing the issuance of electronic invoices, and offered parity between paper and electronic invoices.
As the next step to implementing the invoice rule changes, at the end of April 2013, the French tax authorities released three decrees. These decrees generally put into place not-yet-codified rules—including rules on the general aspects of invoices, and rules relating specifically to e-invoices.
General invoicing rules introduced by new decrees
First, the April 2013 decrees provide details on the new rules for compulsory invoice information items, as required under French law. Although these new requirements are quite limited and aim at a kind of simplification, they may offer businesses an opportunity to review whether their current lists of invoice information items are complete and up-to-date.
Second, the decrees allow companies to issue simplified invoices, under certain conditions, when the amount of the invoice is less than €150.
Third, one of the three decrees details the conditions under which businesses can implement a self-billing procedure or allow a third party to issue invoices on their behalf.
Specific e-invoicing rules
The main points addressed by the April 2013 decrees relate to e-invoicing. While the third amended Finance Act for 2012 initially confirmed the validity of the two pre-existing methods (tax-compliant electronic data interchanges (or EDIs) and electronic signatures), the April 2013 decrees add new requirements, with which businesses now must comply:
- For businesses issuing invoices based on an electronic signature, the electronic signature now must be linked to a qualified certificate.
- For businesses issuing invoices through a tax-compliant EDI, the sequential list of data issued and received now can only be prepared and archived under an electronic format.
Businesses that do not update their current electronic signature and EDI methods to comply with these new requirements must document their invoices with a “reliable audit trail”—so that their invoicing methods cannot be challenged by the French tax authorities.
Lastly, for businesses that do not currently issue electronic invoices, the invoicing reform rules offer a third alternative process—in addition to the tax-compliant EDI and electronic signature methods. Under this third process, businesses are now permitted to issue invoices by any other technical means, provided that they set up documentation and ongoing controls that establish a “reliable audit trail” between the issued or received invoice and the underlying supply of goods or services, so that the authenticity, integrity, and legibility of the invoices can be verified and confirmed.
Tax professionals with Fidal* observe that businesses may want to take a closer look at this third alternative possibility, as it may provide an opportunity to establish an e-invoicing process that may result in reduced administrative burdens and lowered costs associated with issuing invoices.
Administrative guidelines commenting on these new rules are expected to be published shortly by the French tax authorities.
For more information, contact a tax professional with Fidal Direction International in Paris:
+33 1 55 68 14 34
+33 1 55 68 14
* Fidal Direction International is a French law firm that is independent from KPMG and its member firms.