How toPrepare for
the Frenche-Invoicing
Mandatep.1

Brace for impact:
are you readyfor the Frenche-invoicing
mandate?

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France has been planning
to introduce clearance
controls for some time.
When a country adopts clearance controls, thecorresponding tax authority must approve thee-invoice before it is valid and can be sent tothe buyer. The requirements also encompass
transaction reporting as well as invoice lifecycle
and payment lifecycle reporting. France isn’t
alone in planning to implement controls. The
primary reason countries introduce thesecontrols is to close the VAT collection gap.

The 2022 VAT Gap in the EU Report statedthat France’s VAT gap was estimated to be justunder 14 billion Euros in 2020, 8% of VAT Total
Tax Liability.**European Commission, Directorate-General for Taxation
and Customs Union, Poniatowski, G., Bonch-Osmolovskiy,M., Śmietanka, A., et al., VAT gap in the EU : report 2022,
Publications Office of the European Union, 2022

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How Tradeshift
helps your businessto comply with thenew mandate
Adhering to the new requirements can be costly.
But it’s also an opportunity to consolidate andrefine processes. E-invoicing has been beneficial
for many businesses as it helps them reduce
costs by eliminating paper and postage fees.
For larger entities, there are often significant
business automation benefits. Smaller
businesses also profit by being able to checkinvoice statuses and payment statuses on
the Tradeshift platform, which saves multiple
phone calls and emails. In addition, using
Tradeshift helps SMBs ensure that their invoice
meets tax compliance requirements in caseof an audit. Future benefits may be pre-filled

The increasinguse of clearance
controls globally
Clearance controls are well established in Latin
America where authorities were early adopters.
Administrations in Latin America are evolving
their requirements further to encompass payment
receipt reporting and tax benefits. Many of theEuropean countries planning on implementing
their own controls, will be keeping a close eyeon the results achieved by other governments.
Clearance has been a focus for many EU countries.
The EU commissioned the VAT in the Digital Age
report.* To help to explain France’s requirements it’s
good to understand the types of controls and terms.
*European Commission, Directorate-General for Taxation andCustoms Union, VAT in the digital age, Publications Office ofthe European Union, 2023

VAT returns or in the longer term eliminationof the VAT return. Clearance controls push
all businesses to digitize their processes.

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p.5

Periodic vs continuoustransaction
controls (CTCs)
The study covers digital reporting

Digital reporting is always required when using arequirements (DRRs) where tax documents

PDP (the partner digitalization/dematerialization

are to be submitted to tax authorities. Theplatform). When connecting directly to the PPF

means and content of the reporting may vary(the Public Invoicing Portal), CTC Clearance only

but are broadly defined as either periodic

applies when the PPF makes the documents

or continuous transaction controls. A

available for the recipient and there are DRRs

periodic transaction control might befor lifecycle and payment status updates.

monthly or quarterly reporting requirements.
Continuous transaction controls (CTCs)
involve reporting all transactions before orafter the exchange. Clearance can be part ofIn short, all businesses in France

CTCs and involves the government providing

will be required to report invoicing,a token or authorization code, akin to getting

transaction, and payment data toa stamp on your passport when traveling.

the tax authority.

In the report, clearance is defined in termsof the role of the central IT platforms set
up by the tax authority. In a non-clearance
e-invoicing system, the supplier can send

At a first glance, the Y-model representation seems
complicated, but the principle is simple..

the e-invoice directly to their customer
without having to request any token fromThe PPF (aka. the government’s ‘Portail public dethe tax authority. In a clearance system,facturation’) sits in the middle. Taxpayers or service

the supplier is required to either (i) obtainproviders can connect to the PPF via EDI or API,a verification token from the tax authority

small taxpayers can use the PPF’s web portal. This

as a precondition to send the invoice, oris where transactions must be reported to. The tax(ii) send the draft e-invoice to a central IT

authority gets data from the PPF.

platform, which in turn delivers (or issuesand delivers) the e-invoice to the customer.
France’s new e-invoicing and e-reporting
compliance model is a mix between
digital reporting requirements and CTCClearance. Digital reporting is required forinternational B2B and B2C transactions.

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The French clearance
model, explained

Businesses can connect directly to the PPF or theyIt’s up to each business to determine whether they

can use service providers. There are two types

will use an OD, a PDP, or connect directly. A buyerof service providers. Dematerialising Operators

may request suppliers use their PDP’s service to(ODs) and Registered Private Platforms (PDPs).

send documents or provide additional fields in

The difference between an OD and a PDP is that adocuments submitted to the PPF and that’s okay.,

PDP is authorized to facilitate transactions directly

Suppliers can issue documents through different

between a supplier and a buyer and periodicallymeans. With the choice available to businesses,

report transactions to the PPF.

ensuring invoices are addressed correctly is going to
be important, and only buyers, suppliers, and their

The PDP concept was introduced to ease adoption

PDPs can access the directory.

for companies with existing invoicing solutions.
Using a PDP essentially means no major change
is needed to the way companies are exchanging
documents. PDPs offer additional businessautomation benefits to their clients in addition to
supporting regulatory requirements.

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French e-invoicing
mandaterequirements

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The Directory
The Directory is a list of all registered businesses
defined at the SIREN and SIRET levels. It
allows businesses to further define recipient
information using routing codes if required.
The combination of SIREN, SIRET, androuting code form an addressing line code
which must be included on documents toensure successful transmission. The threelevels of addressing options give buyers theflexibility to maintain different solutions indifferent areas of the businesses, possibly
removing some implementation efforts.

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There are 4 possible flows
for the Directory:
1e-Reporting

The issuer is consulting the Directory toThe e-reporting requirements are demanded

obtain information for addressing

at transaction-level. B2B invoicing is mandated

an invoice

to be in electronic form so each e-invoiceneeds to be submitted to the PPF.

2The buyer is requesting to update
information in the Directory

e-Reporting, in the context of French requirements,
refers to reporting of International B2B transactions

3The PDP request to update theand reporting of B2C transactions. The mandate tobuyer’s information in the Directory

issue e-invoices for these types of transactions isn’t

for their buyer

being introduced at this stage. Reporting of lifecycle
and payment statuses will be covered below.

4

The PDP makes a query to the Directory toensure the invoice is addressed correctly

Invoice issuers and invoice receivers are required toreport on all transactions. For B2B transactions theBusinesses need to ensure they havea plan in place to address invoices
accurately and that their suppliers canaddress invoices accurately. Failure to
do this will result in delays – errors inline codes will need to be corrected,
leading to unnecessary back-and-invoice data should be reported, regardless of themethod by which an invoice is received or issued. So
if paper invoices are still being used, a digital recordof that invoice with the required information forreporting will be required. Reporting of international
B2B transactions requires the same data as
domestic transactions except for French identifiers.

forth between buyers and suppliers.

The same applies to B2C reporting if invoices are

As a PDP, Tradeshift provides peace

be aggregated as invoices aren’t always issued.

of mind to users that documents areaddressed correctly by connecting to theDirectory and ensuring documents aresent to the right place. If documents arebeing sent to another PDP, interoperability
ensures that the other service provider
receives the data on behalf of their client.

issued. B2C reporting requirements allow data to

At this stage, businesses should be evaluating if
they have fragmented processes where data fromtransactions is not being captured. It’s possible
to use different PDPs for different parts of thebusiness, the important thing to plan for is that alldata is reported on. Plans will need to be created
to ensure that the data is available. e-Reporting
will be mandated at different times depending on
the size of the business but all businesses shouldbe able to start providing this from July 2024.

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Lifecycle & Payment
Status Reporting
The e-invoicing mandate requirements involve
standardizing invoice lifecycle and payment
status reporting in France. Lifecycle statuses
are reported in chronological order and data
is made available to all parties involved in thetransaction. While businesses may use different
terminology in their tools today, it’s going to bebeneficial to update the terms used to improve
communication quality. The majority of thestatuses are provided by the buyer, and not all
statuses need to be used.

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The statuses Submitted, Rejected, Refused

Tradeshift already supports the requiredand Payment Received are required. All

statuses on our platform and these can beother statuses are optional.

connected to ERPs using APIs to ensuretransitioning to these new requirements isMade Available, In Hand, Approved,
Partially Approved, and Payment Sent

made easily.

statuses are recommended.

e-Invoice Content

Although not all statuses are mandatory,

There are 24 fields required in the invoice

there is a clear benefit to accounts payable
teams in providing visibility into all as manyof them as possible to suppliers. Invoice
issuers are now going to be required toissue reports to the PPF showing payment
received statuses for domestic, international
B2B, and B2C transactions. This can beprovided directly to the PPF or via theselected PDP.

data which require the provision of:• Tax identifiers and country of
the issuer and receiver• Unique invoice number or correctedinvoice number for credit notes• Category of the transaction –goods, services or bothp.12

• Date of issue and date of delivery• Amounts excluding and including
VAT broken down by VAT rate aswell as any discount information• Self-billing and reverse charge indicators• References to specific acts in case of tax
exemption or special tax schemes
Invoice issuers and receivers both have aresponsibility to report on transactions. It is
the issuer’s responsibility to ensure that theinformation in the invoice is accurate but thedata will also form part of the buyer’s reportingrequirements. Most of the requirements arealready present on many businesses’ invoices.
With the standardization of the formats, there
are expectations that specific references areprovided in a structured format that may be
audited rather than free-form text.

Tradeshift can help your businessto understand your supply chain’s
readiness for the changes andhighlight missing information.

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Are you readyfor the Frenche-invoicing
mandate?
We can help!

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We’ve summarized the key
requirements to consider in
preparing for the new Frenche-invoicing and e-reporting
mandate and its regulations.
Understanding and complying with technical,application, and functional controls to reduce
error rates involves a deep understanding of thedata requirements and corner cases. If you areplanning on engaging directly with the PPF then
you will need to start familiarizing yourself with thetechnical requirements published by
the authorities.
Tradeshift has a range of services available to help
businesses manage the change and is working
closely with the authorities to become a PDP.
We have a wealth of experience in navigatingclearance solutions in other countries and arelooking forward to helping our customers easily
navigate these changes.
Learn more about the French e-Invoicing ande-reporting mandate coming in 2024.

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About Tradeshift
Tradeshift is the cloud-based supply chain platform that transforms
the way B2B buyers and sellers connect, transact and trade. We’rea leader in e-invoicing and AP automation, offering full international
compliance in 50+ countries, including China. We’re also an innovatorin B2B marketplaces and embedded fintech services that bring value,opportunity, and growth to any business that joins the network.
Headquartered in San Francisco, Tradeshift’s vision is to connect every
company in the world, creating economic opportunity for all. Today, theTradeshift platform is home to a rapidly growing community of buyers andsellers operating in more than 190 countries. Find out more at:www.tradeshift.com

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