If you are a freelancer, sole trader or small business owner in France you may have already begun to receive emails about ‘facturation électronique’ – here’s what the new electronic billing system means.
It’s not due to come into effect until September, but if you are registered as a business in France (including as a freelancer under the micro entrepreneur scheme), you may have already started to receive emails urging you to begin the process for electronic billing.
Here’s a look at what it is, what you have to do and when.
What is electronic billing?
The facturation électronique scheme is a government-mandated change to the way businesses both bill their customers and report their activity to the tax office.
It essentially means that all businesses will have to send ‘electronic bills’ via a specialist platform – which simultaneously sends the bill to your customer and reports the amount billed to the tax office, creating a pre-filled VAT return each year.
Even if your business does not issue bills, you must be set up to receive bills from suppliers, contractors, etc. in electronic format.
This applies to people selling either goods (e.g., a jewellery-making business) or services (for example freelance translators, writers or tutors), or a mixture of both (e.g., plumbers or electricians who bill for both a new item and the installation of the item).
Does this include people registered as a micro-entrepreneur?
The micro-entrepreneur (formerly known as auto-entrepreneur) status is usually used by freelancers, contractors, sole traders or small businesses who earn under a certain amount per year.
Part of the attraction of the status is being exempt from VAT (up to a certain ceiling) – however, even those who don’t actually have to pay VAT are covered by the electronic billing changes.
The French tax office explains it like this: “The reform applies to all VAT-registered entities, whether or not they are liable for VAT. Operators benefiting from the VAT exemption scheme are VAT-registered but not liable for VAT, as they do not include VAT on the invoices they issue to their customers and therefore do not pay VAT.”
Not, in our opinion, the clearest explanation, but the FAQ section is more straightforward: “Q: As a micro-entrepreneur or auto-entrepreneur, am I affected by the electronic billing reform? A: Yes, you are affected.”
When?
The reform comes into effect from September 1st, 2026. From that date, all businesses must be set up to receive electronic billing for any business-related expenses (e.g., phone, internet or electricity providers).
Larger businesses will be required to start issuing their bills electronically from this date, but those registered as micro entrepreneurs have until September 1st 2027, to start issuing electronic bills.
OK, but how do I actually create and send these electronic bills?
The bills must be sent via a plateforme agréée, that is, a private company accredited by the French state to create these types of bills, in the correct format.
They include most of the well-known accounting software packages, so you may already be using one – find the full list here.
Why is the government doing this?
They say that this system will simplify reporting for businesses and enhance business efficiency through digitisation.
Also, it will make it harder to commit VAT fraud (the government’s real motivation? You decide). Instead of businesses sending out bills all year and then self-reporting their VAT at regular intervals, each transaction is automatically added to their VAT account, keeping a real-time record of what is being billed.
Using a billing platform should also make it easier to track invoices and their processing, which is why some businesses already use them.
What if I’m happy sending out my bills on paper?
Unfortunately, this is not a choice, it is an obligation for any business registered in France.
You can find full details on how it all works here while this mini quiz allows you to answer 4 questions about your business and then receive a personalised plan of what exactly you need to do next.
Does this mean that I don’t have to do my annual tax declaration, or my URSSAF reporting?
No. The electronic billing concerns VAT, which is only one small part of the tax and social charges that businesses are liable for. The annual tax declaration concerns income tax (impôts sur le revenu), while URSSAF administers social charges for businesses and freelancers.
Also, this is France – I know you didn’t really think you were going to be spared the bureaucracy?
READ ALSO: URSSAF: What is it, how it works, and how it affects you✎
