Since January 1st, 2020, all companies dealing with the public sector, regardless of their size, must send their invoices in electronic format. Likewise, all public entities in the European Union are required to accept electronic invoices addressed to them. The main objective of introducing e-invoicing is to simplify sending and receiving invoices, as well as prevent tax evasion. The process of introducing e-invoicing obligations for B2G, which started in 2017, has been completed. In France, this is done via the Chorus Pro platform (also supported by PEPPOL); single portal to address all public entities.
In addition, the 2020 finance law generalizes this requirement to the private sector, since all companies must be able to receive invoices in electronic format from July 1, 2024. An obligation to issue electronic invoices for B2B sales, as well as to submit invoice data to the tax authorities, will also be imposed on companies gradually between 2024 and 2026.
These measures are necessary to establish:
– mandatory e-invoicing for domestic transactions between companies;
– an e-reporting obligation (transmission of billing and payment data for transactions carried out with natural persons or foreign operators).
This would translate to:
– an obligation to receive electronic invoices, by all companies from 2023, and
– e-invoicing and e-reporting obligations for sales operations, applicable from 2023 for large companies, from 2024 for medium-sized companies and from 2025 for SMEs (companies with fewer than 500 employees) and VSE (company with less than 20 employees).
The notable difference will be the “physical” receiver of the invoice issued. While before it was transmitted directly by the seller to the buyer, the implementation of mandatory e-invoicing will result in the appearance of an intermediary in the invoice transmission chain. in fact, the seller will have to always send their invoice electronically to an individual certified as a centralizing public platform or directly to the centralizing public platform. The platform (or certified individual) would then be responsible both for transmitting the invoice to the customer and for transmitting the billing data (via the centralizing public authority in the event of the intervention of a private operator) to the tax administration.
The administration has changed its initial position by supplementing the obligation to transmit invoices in electronic format to the tax authorities for transactions carried out in France by professionals (“e-invoicing”), with an obligation to transmit billing data (“e-reporting”), applicable to sales transactions carried out with natural persons (“B2C”) and foreign operators (B2B sales, intra-Community sales and exports). The e-invoicing model chosen is a tax clearance model already used around the world, with the difference that the data is not transferred directly to the tax administration but via certified agents or the centralizing public platform. This intermediary collects taxpayer data and then shares it with the tax administration via the e-invoicing portal. The issuer and the recipient of the invoice can also communicate without the intermediary of the agent.
The e-invoicing portal supports three modes of account transfer that can be used by taxpayers: EDI, API or Web service. Also, three data transmission formats UBL 2.1, CII and Factur-X are used.
Finally, the counterparty of the seller (professional buyer) would have to transmit the data relating to the payment of these invoices (status, date of payment) to the tax authorities. This data does not appear on the invoices but constitutes information necessary to determine the due date for VAT when this occurs on collection (provision of services).
The e-invoicing control system is an initiative undertaken by many countries with the aim of reducing the gray economy and tax evasion. An important and new component of this initiative is the certified system put in place so that taxpayers can electronically secure each transaction at the time of sale.
One such system is TaxCore® – a scalable software solution that enables tax compliance through usage of commercially available technologies and public APIs to issue fiscal invoices in online/offline environment and collect audit data. It suppresses tax evasion, decreases the activity of gray economy and fights frauds.
There are commercial solutions that address all of the above-mentioned requirements. These solutions enable the businesses to exchange and issue invoices protected by digital certificates, as well as the Tax Authorities to have clear, secure and reliant insight into the content of such transactions.
TaxCore® solution works within any type of clearance mechanism model where single service provider connects both the supplier and the buyer to its platform to offer e-invoicing and other supply chain services.
TaxCore® system can receive and transmit e-invoices issued by supplier in online or offline regime in the same manner.
All e-invoices are received in a centralized database.
All e-invoices are authenticated through a secure authentication method.
TaxCore® verifies that all e-invoice data are correct through the automated verification of the validity of the Taxpayer Identification Numbers (TIN) or corporate number or national ID number, as well as the tax calculation.
TaxCore® has the option for buyers to verify that e-invoice has been received and has gone through automated verification.
TaxCore® makes it easier to develop and generate reports and statistics.
E-invoices in TaxCore® centralized database are available to both sellers and buyers.