France’s Invoicing Laws: Ensuring Compliance

In France, like in many other countries, invoicing is a crucial aspect of the business process, serving as a record of transaction for both buyers and sellers. However, the French government has established strict regulations concerning invoicing practices to ensure transparency, prevent fraud, and protect all parties involved. This article explores the legal requirements for issuing invoices in France and provides examples to ensure your business remains compliant.

Understanding the Basics of French Invoicing Laws

The French Commercial Code and the General Tax Code govern invoicing practices in France. They outline the mandatory details that must be included in every invoice and set the rules for invoice management and storage. Non-compliance can result in severe penalties, including fines and legal actions.

Mandatory Invoice Information

All invoices issued in France must include specific information to be considered valid. Below is a list of the mandatory details:

• Date of Issue: The exact date when the invoice was created.
• Unique Invoice Number: A unique and sequential number based on one or more series to identify the invoice.
• Seller’s and Buyer’s Legal Information: Full names and addresses of both parties. For companies, this includes the legal form, city of registration, and registration number.
• Description of Goods or Services: A clear and precise description of the products or services provided.
• Quantity and Price: The quantity of goods or services and the price per unit, excluding tax.
• Total Amount Due: The total amount that the buyer must pay, including and excluding taxes.
• VAT Information: The applicable VAT rate and the total amount of VAT due.
• Payment Terms: The due date for payment and any potential discounts for early payment or penalties for late payment.

Electronic Invoicing

In France, electronic invoicing is becoming increasingly popular, and it is subject to the same legal requirements as paper invoices. In fact, since January 1, 2020, all suppliers of public entities are required to send their invoices electronically.

Example: A graphic design freelancer providing services to a local municipality must submit their invoices through the Chorus Pro portal, the platform designated by the French government for electronic invoicing with public entities.

Invoice Storage and Management

Invoices must be stored for a minimum of six years in France. They can be kept in paper form or digitally, but they must be readily available in case of an audit. The storage system should ensure the integrity and authenticity of the invoices over time.

Ensuring Compliance: Best Practices

Adhering to France’s invoicing laws requires diligence and attention to detail. Below are best practices to help ensure compliance:

1. Use Invoicing Software: Leveraging invoicing software that complies with French regulations can simplify the process and reduce the risk of errors.
2. Regular Audits: Conduct regular audits of your invoicing practices to identify and correct any discrepancies.
3. Stay Updated: Keep abreast of any changes in French invoicing laws to ensure your business remains compliant.

Issuing invoices in France requires a comprehensive understanding of the local laws and regulations. By including all mandatory information, adhering to electronic invoicing rules when applicable, and ensuring secure and accessible storage of invoices, businesses can mitigate the risk of legal issues and contribute to a transparent and trustworthy commercial environment. Remember, when in doubt, seeking legal advice is always a prudent course of action to ensure full compliance with France’s invoicing laws.

Taxes Applicable to Companies in France

Corporate Income Tax (Impôt sur les Sociétés)

All companies operating in France are subject to corporate income tax on their profits. The standard rate is 28%, but a reduced rate of 15% applies to small companies on the first €38,120 of profits.

Value Added Tax (TVA)

Companies must charge VAT on goods and services sold in France. The standard VAT rate is 20%, but reduced rates of 10%, 5.5%, and 2.1% apply to specific categories of goods and services.

Payroll Taxes

• Social Security Contributions: Employers and employees must contribute to the French social security system. Employer contributions are typically between 40-45% of gross wages.
• Unemployment Insurance: Employers must also contribute to unemployment insurance, at a rate that varies depending on the company’s size and industry.
• Additional Levies: There may be additional levies and contributions required, such as the transport levy in certain urban areas.

Local Business Taxes

Companies may be subject to various local taxes, depending on their location and size. These can include:

1. CET (Contribution Économique Territoriale): A local tax that includes the CFE (Cotisation Foncière des Entreprises) based on the rental value of property used for business, and the CVAE (Cotisation sur la Valeur Ajoutée des Entreprises) based on the company’s value-added.
2. Property Tax: Companies owning property are subject to property tax, the rate of which varies by location.
3. Professional Training Tax: Companies must contribute to the financing of professional training.

Other Taxes and Contributions

• Apprenticeship Tax: Companies with more than 250 employees are required to contribute to the apprenticeship tax.
• Contribution Sociale de Solidarité (C3S): Companies with a turnover of more than €19 million must pay the C3S, calculated at 0.16% of turnover.
• Research Tax Credit (CIR): Companies engaged in research and development activities may be eligible for a tax credit.