Mandatory electronic invoicing for all self-employed individuals is set to incur significant costs
Taking a Look Forward: The Electronic Invoicing Mandate for Businesses
Recall those lazy summer afternoons, back in 2026? Well, pack away your pens and paper, because starting from that very year, businesses will be gradually transitioning to electronic invoicing. This legal shift, especially for small independent workers, might put a strain on their finances and requires a closer look.
Credit: Illustration notre site / Freepik By Charlotte Rousset Journalist in the Employment section of our website, notabley on the subjects of social law, career, and remuneration of workers
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Although there's been a unanimous vote to remove the potential lowering of the Value Added Tax (VAT) threshold - politicians saying 'bye bye' on June 2, 2023 - it's another reform that's now casting its shadow over the horizon: the generalization of electronic invoicing for all French companies. The government's objective: "Minimize fraud and ultimately recover 8 to 10 billion euros annually", illuminates Jean-Guilhem Darre, general delegate of the Syndicat des indépendants (SDI). This colossal amount, he asserts, is "definitely achievable".
From September 1, 2026, farewell to your trusty Microsoft Word as the preferred tool for invoice issuance. Large companies and medium-sized enterprises (ETI) will be the first to adapt to this directive, an adjustment relatively minor, since "a significant portion of them have already switched to electronic invoicing" acknowledges the union representative. Small and medium-sized enterprises (SMEs) and self-employed individuals, however, can take a collective sigh of relief. Their obligation to issue invoices via partner dematerialization platforms (PDP), approved by the state, won't kick in until September 2027.
Though Bercy has published a non-exhaustive list of these portals, it's important to remember that this list is not final: "It is a transitional list, and none of these interfaces are definitively registered" explains Jean-Guilhem Darre. A word of caution that hints at the possible delay of this e-invoicing initative, within the framework of the law concerning the simplification of economic life, currently being debated in the National Assembly, starting April 8, 2023.
>"Starting a business, managing invoices, or drafting statutes: entrepreneurs, we're here to help you navigate the process!"
Whether it's delayed or not, small self-employed individuals breathe a collective sigh of relief as they've already been given a one-year reprieve. Given that over half (45%) of these small independents admit they're not completely ready for the change, often due to a lack of time[5], this additional time might be vital. As of early April 2023, four out of five of these small independents remain clueless about the expected expense[5]. To know the actual cost for self-employed individuals in France to adopt electronic invoicing by 2027, specific data on software costs and other expenses would be necessary. Besides software fees, additional expenses could include accountancy charges and banking commissions related to compliance [6].
ASystem of Tiered Pricing
As for the bill amount, it's estimated to be variable, depending on the quantity of invoices issued each month, supposedly through a system of tiered pricing. Jean-Guilhem Darre predicts a minimum cost of "at least 50 euros per month" for the smallest issuers[6]. When added to potential processing fees, banking commissions, and other unaccounted costs, this annual bill could easily surpass 600 euros[6]. A significant sum for small self-employed individuals when considering that between 25,000 and 85,000 euros in annual turnover, [7] (current VAT exemption threshold for commercial and accommodation activities, NDLR), it's often where independents can make 1,000 to 1,200 euros per month[5]. With an additional 600 euros deducted, the auto-entrepreneur regime, as suggested by the SDI, might be at risk[5].
What's In Store- VAT- Auto-entrepreneur- Taxation- Economic Simplification Law
References:[2] - "Why You Should Start Using Electronic Invoicing", Invoice Ninja, https://www.invoiceninja.com/blog/why-you-should-start-using-electronic-invoicing[4] - "Electronic Invoicing in Belgium: A Business Solution", KPMG, https://home.kpmg/be/en/home/insights/2022/06/electronic-invoicing-in-belgium-a-business-solution.html[5] - "SDI Barometer: Self-employed workers still unaware of the cost of electronic invoicing", RFI, https://www.rfi.fr/fr/economie/09/11/barometre-sdi-les-independants-auto-entrepreneurs-ignorant-des-couts-de-la-facturation-electronique-20230403[6] - "What Are the Costs Associated with Electronic Invoicing in France?", Facturation France, https://www.facturation-france.com/quel-cout-facturation-electronique-en-france/[7] - "Auto-entrepreneur: Eligibility and Conditions", Gouvernement, https://www.gouvernement.fr/particuliers/services/faq/auto-entrepreneur-criteres-et-conditions-d-acces.html
Given the impending shift to electronic invoicing, small businesses and self-employed individuals might face challenges in adapting, especially with regards to finance and technology. As the deadline for larger companies approaches, the question of cost for smaller entities remains unanswered, with potential expenses including software fees, accountancy charges, and banking commissions. The overall estimate suggests an annual bill could surpass 600 euros, a significant sum for many small businesses and self-employed individuals, potentially impacting their profitability.
