It's a small revolution in the business world. In order to combat VAT fraud, from July 1, 2024, it will be compulsory for invoices exchanged between professionals to transit via a public invoicing portal (Chorus Pro) or a private partner portal. These portals will enable the tax authorities to cross-check data automatically. As the main aim is to improve control over VAT declarations, the question arises for auto-entrepreneurs, who in most cases are not affected by this tax.
As a reminder, the basic VAT exemption exempts companies from declaration and payment when their sales do not exceed €101,000 for commercial activities, and €39,100 for service provision activities. B-to-B invoicing is changing even for auto-entrepreneurs.
Need instructions for receiving and issuing electronic invoices? Here are the essentials for the self-employed.
Electronic invoicing reform
The introduction of electronic invoicing is part of the 2020 Finance Act. It is intended to reduce the administrative burden on companies and secure commercial relations. Eventually, it could also facilitate VAT declarations through pre-filling.
The aim of the European Union and the French State is to be able to immediately detect various VAT-related anomalies, such as incorrect application of rates, fraudulent claims for credit refunds, exceeding tax thresholds...
Auto-entrepreneurs will soon need to be able to receive and issue electronic invoices. For the time being, this will only apply to business-to-business transmissions. Individual customers will continue to receive their paper invoices.
From July 1, 2024, all companies, whatever their size, will be required to receive their supplier invoices electronically. To do so, they will have to be registered on the public Chorus Pro platform or on an approved private platform. This will enable them to retrieve even their telephone or energy bills, for example.
In the medium term, by January 1 2026, VSEs and SMEs subject to VAT will also have to be able to send electronic invoices to their business customers. Even if auto-entrepreneurs are not liable for VAT, they are still taxable, just like any other business from the moment they are set up. So, if the auto-entrepreneur's customers are companies or public bodies, he or she will be obliged to send them an electronic invoice.
How can I receive and issue electronic invoices for the self-employed?
First of all, we need to define what an electronic invoice is. It should not be confused with the digital invoice, which is already widely used and frequently sent by e-mail in PDF format.
Electronic invoices, also known as e-invoices or e-invoicing, must be issued or received via a platform. It automatically includes all legal information. Only the content varies. The term dematerialized invoice is also used, but this type of invoice also includes digitized paper documents.
Providing an invoice to a private customer is only compulsory if the amount of the sale or service exceeds €25. In the case of a sales receipt, for example, even if an invoice is not required, the VAT-registered merchant must still transmit the transaction details to the tax authorities via a partner dematerialization platform or the public portal.
Once a platform has been chosen, supplier invoices will arrive in electronic form and will be visible on that platform, regardless of whether it is different from the suppliers in question.
Invoices to be issued will pass through the same platform, which will convert the invoice into another format, readable by the customer, and transmit certain data to the tax authorities, such as supplier and customer identification, the amount of the transaction before tax, the VAT rate and amount...
In the same way, platforms acting as intermediaries transmit data on non-invoiced transactions and payments for all operations.
Good to know: the official list of registered platforms will be published in 2023.
What support is needed to implement this reform?
This forthcoming legal obligation is not reassuring for the self-employed. However, there are a few advantages:
- less administrative work,
- simplified VAT returns (if pre-filled),
- shorter payment times,
- securing operations,
- cost reduction,
- improving inter-company relations.
By 2026, the self-employed will have to consider equipping themselves with software for electronic invoicing. For all those companies that need to automate their invoicing system, there are already a multitude of e-invoicing solutions available.
For its part, the French government advises users to consult the impots.gouv.fr website and identify their needs, particularly in terms of computer hardware, as investment in specific equipment may be necessary. To help users of the Chorus Pro platform, the Agence pour l'informatique financière de l'État has created a Chorus Pro Community portal. With the deadline fast approaching, it's imperative to get informed about the reform and choose the right tools.