Transactions carried out with/by a Monegasque VAT taxable person within the scope of the French system for electronic invoicing (e-invoicing) and transmission of transaction and payment data (e-reporting)

Electronic invoicing (e-invoicing)[1] for domestic transactions involving the purchase and sale of goods and/or the provision of services between companies established in France that are subject to VAT ("Business to Business (B2B)")[2], as well as the transmission to the tax authorities of transaction and payment data (e-reporting)[3] enabling the overall economic activity of the business to be reconstructed, will gradually become compulsory, according to a roll-out schedule revised by the French Finance Law 2023-1322 of 29 December 2023 (LF 2024).[4]

As companies established in Monaco are not considered to be established outside France for VAT purposes[5], the question arises as to whether the new French e-invoicing and e-reporting arrangements apply to transactions carried out with or by a Monegasque company.

The French government has set out its position on this issue in its FAQ - Facturation électronique (version dated 5 January 2024), according to which:

¤ A transaction between two French VAT taxpayers in which the goods are delivered to Monaco falls within the scope of the French e-invoicing system:

The French tax authorities point out that this "transaction is deemed to take place in France under article 258 of the code général des impôts (CGI) [General Tax Code] and is subject to French invoicing rules".

It concludes that the transaction falls within "the scope of article 289 bis of the CGI and must be billed electronically", and states that "delivery to Monaco will be subject to an additional statement relating to the delivery address, which is different from the billing address".

¤ The activities in France of Monegasque VAT taxpayers registered with the Service des Impôts des Entreprises (SIE) [business tasx service] in Menton fall within the scope of the French e-invoicing system:

The French administration notes that "transactions carried out in France by or with a Monegasque operator", because they "constitute internal deliveries", could "fall within the scope of electronic invoicing within the meaning of article 289 bis of the CGI ».

However, given that Monegasque operators are not registered in the French registre du commerce et des sociétés [trade and companies register] [6]/répertoire SIRENE[7], it considers that "only Monegasque taxable persons registered with the SIE de Menton for their business on the mainland will be in the directory and will therefore fall within the scope of electronic invoicing".

¤ A transaction between a French VAT taxable person and a Monegasque taxable person not registered with the Service des Impôts des Entreprises (SIE) falls within the scope of the transmission of transaction data (e-reporting):

With regard to "transactions with Monegasque operators not registered with the Menton SIE", the French administration states that "the transactions fall within the scope of the transmission of transaction data (e-reporting) of the taxable person with a SIREN number, i.e. the one established on the French mainland".

¤ A transaction between a French VAT taxable person and a Monegasque taxable person who exchange invoices electronically (e-invoicing) does not fall within the scope of the transmission of transaction and payment data (e-reporting):

Finally, the French administration states that "A Monegasque operator wishing to enter the field of electronic invoicing (e-invoicing) will be able to do so. French taxable persons will then be able to use e-invoicing to trade with this operator. In this case, to avoid double transmission by the taxable person established in France and the one located in Monaco, the French taxable person will no longer have to transmit transactions with Monaco using e-reporting."

More information on the official website of the French Ministère de l’Economie, des Finances et de la Souveraineté industrielle et numérique > https://www.economie.gouv.fr/c...

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NOTES:

[1] Invoices between professionals will have to comply with a standardised electronic format, and will be sent via platforms (the public "chorus pro" invoicing portal or a private partner dematerialisation platform registered with the tax authorities). A PDF invoice sent by e-mail is not an electronic invoice within the meaning of the French e-invoicing system.

[2] Transactions exempt from VAT under the provisions of articles 261 to 261 E of the code général des impôts (CGI), which are exempt from invoicing, are not subject to the electronic invoicing requirement: health services (article 261, 4, 1° CGI), education and training services (article 261, 4, 4° CGI), real estate transactions (article 261, 5 CGI), transactions by non-profit associations (article 261,7 CGI), banking and financial transactions and insurance and reinsurance transactions (article 261C CGI).

^[3] E-reporting is the electronic transmission to the tax authorities of certain information (e.g. amount of the transaction, amount of VAT invoiced) relating to commercial transactions not covered by electronic invoicing, as listed in article 290 of the code général des impôts (CGI): sales and service provision transactions with private individuals ("Business to Consumer (B2C)" such as retail trade) or with operators established abroad (exports, intra-Community deliveries, etc.). The latter may also be subject to the e-reporting obligation if they carry out transactions that are deemed to be located in France and subject to VAT.

[4] The timetable for e-reporting follows that for electronic invoicing (e-invoicing): compulsory issue of invoices in electronic format and e-reporting from 1 September 2026 for large companies and medium-sized establishments, and from 1 September 2027 for micro, small and medium-sized companies; compulsory receipt of invoices in electronic format from 1 September 2026 for all companies, whatever their size, where their supplier is obliged to issue invoices in electronic format (article 26 III B of French rectifying Finance Law for 2022 no. 2022-1157 of 16 August 2022 amended by article 91 of Finance Law for 2024 no. 2023-1322 of 29 December 2023).

[5] For VAT purposes, the Principality of Monaco is not considered a third country to France, but forms a single territory with France. French VAT legislation is transcribed into the Monegasque Code des taxes et du chiffres d’affaires (CTCA) by sovereign ordinance (subject to the necessary adaptations). The other Member States of the European Union treat transactions originating in or destined for the Principality of Monaco as transactions originating in or destined for France.

[6] Since 1 January 2023, in France, commercial companies have been registered in the registre national des entreprises (RNE) [national register of businesses] instituted by Law no. 2019-486 of 22 May 2019 relative à la croissance et la transformation des entreprises ("loi Pacte"), and additionally in the registre national du commerce et des sociétés (RCS) [national trade and companies register].

[7] The SIREN number issued by INSEE when the company is set up identifies its legal existence in France.

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