What obligations will the 2020 Finance Act place on Digitalization invoices?
The French government's planned reform of the 2020 Finance Act is in line with global developments. This is in favor of the development of electronic invoicing and the transmission of data
The Digitalization of the invoice and its data is a reality in several countries around the world, notably in Europe (Italy, Spain, Portugal, Estonia, etc.) and South America (Chile, Mexico, Brazil, etc.).
The aim is twofold: to simplify the tax environment and combat fraud. In the European Union, the use of electronic invoicing is a Community obligation for exchanges with the public sector. The use of e-invoicing for business-to-business transactions is growing, but is not regulated.
To support this modernization of economic life, the French government has decided to extend the scope of e-invoicing obligations. This extends to all domestic transactions between companies between July 1, 2024 (formerly 2023) and January 1, 2026 (formerly 2025). Article 153 of the Finance Act for 2020 sets four objectives for the introduction of the e-invoicing obligation:
- Boost business competitiveness by reducing the administrative burden of preparing, sending and processing paper invoices, and by securing commercial relationships.
- Combating tax fraud and reducing the VAT gap through automated cross-checking
- To provide an up-to-the-minute picture of business activity, so as to facilitate more precise management of the government's economic policy actions.
- Eventually, pre-filling will make VAT returns easier.
