Introduction to the French E-Invoicing and E-Reporting Mandate and the use of SAP Document and Reporting Compliance - FAQ and lessons learned

On 29 December 2023, the French authorities published the legislation on the 2024 budget, which included updated timelines for the mandatory e‑invoicing and e‑reporting framework. This reform represents a fundamental shift in how businesses operating in France will need to handle invoicing and transaction reporting. The introduction of mandatory e-invoicing and e-reporting obligations overarching objectives are to combat VAT fraud, reduce the VAT gap, simplify compliance obligations, and provide the French tax authorities with near‑real‑time visibility over commercial transactions.  

The mandate comprises two complementary requirements: e‑invoicing and e‑reporting. 

• Mandatory B2B e-invoicing: concerns the mandatory electronic issuance, transmission, and receipt of structured electronic invoices for domestic B2B transactions between businesses established and VAT registered in France. 

• E-reporting: applies more broadly to the transmission of data to the French tax authorities for transactions outside the scope of e-invoicing, such as B2C transactions and cross-border B2B transactions. Under e-reporting you have transactional data (sales to foreign taxpayers and/or B2C sales and purchases from foreign taxpayers) as well as non-transactional data (invoice life cycle and/or payment data for specific (service) invoices)

Together, these two requirements are designed to provide the French tax administration with a comprehensive and timely view of all taxable transactions taking place in or connected to France.

As SAP Document and Reporting Compliance (SAP DRC) is an authorised Platforme Agréée (i.e. hereafter PA), many organisations have chosen it as their e-invoicing and e-reporting solution provider to meet the upcoming French requirements. Drawing on our experience supporting clients through these implementations, we would like to share some of the most frequently asked questions raised during the implementation journey and some key lessons learned.

Frequently asked questions

Can an establishment under a legal entity issue e-invoices under its own SIREN?

Context: A legal entity in France may operate through several establishments. In SAP, the legal entity is typically represented by a single company code, with the SIREN maintained at company-code level. As a result, when an establishment belonging to that legal entity issues an e-invoice, SAP DRC derives the SIREN from the company code, rather than from the specific establishment involved in the transaction.

Answer: It depends on the setup.

• Standard SAP DRC: In the standard configuration, an establishment cannot issue e-invoices using a different SIREN from the one maintained at company-code level. The company-code SIREN is used by default, meaning all establishments assigned to that company code will share the same SIREN for e-invoicing purposes.

• With a BAdI (i.e. BAdI EDOC_ADAPTOR (SET_OUTPUT_DATA) implementation:  It is possible to override the standard logic (in a fit-to-standard approach) and populate the e-invoice with the establishment SIRET number (please note that a separate XML fields needs to be made available on the e-invoice, to populate this on the e-invoice). This allows the e-invoice to reflect the establishment carrying out the transaction. However, this approach requires additional development, testing and validation to ensure that the correct identifier is derived and that the resulting e-invoice remains compliant with French e-invoicing requirements.

Can SAP DRC be used for e-reporting purposes by a French non-established entity?

Context: A legal entity established in another country may hold a foreign VAT registration in France without having a local establishment there. In this scenario, the foreign VAT registration is generally not in scope for French e-invoicing. However, it may still be subject to French e-reporting obligations, for example, the reporting of transaction and/or payment data for transactions subject to French VAT.

Answer: This can be supported in SAP through the Plants Abroad functionality. It is essential that the Plants Abroad setup is correctly configured first, as this provides the foundation for any subsequent SAP DRC-specific development.

However, this is not supported as a standard SAP DRC out-of-the-box configuration. Similar to the SIREN scenario described above, additional development, configuration, and testing will be required to enable the correct e-reporting treatment for the foreign VAT registration.

How does a company get registered in the centralised directory (Annuaire)?

Context: Under the French e-invoicing mandate, every company (i.e. legal entity) in scope must be registered in the centralised directory so that its trading partners, and their PAs, can identify the correct recipient for e-invoice delivery. Companies cannot register themselves directly in the directory; registration must be performed by their selected PA on their behalf.

Answer: A company must first select and contract with a PA before it can be registered and made visible in the centralised directory. For companies using SAP DRC, SAP has a registration process in place which is triggered once you register your SIREN/SIRET in the SAP DRC Cloud edition production environment.  Once completed, SAP sends a contract to each entity’s legal representative for signature to finalise the registration.

Which e-invoice formats does SAP DRC support for French e-invoicing purposes?

Answer:

• Accounts Payable (inbound): XML UBL, XML CII, and Factur-X.

• Accounts Receivable (outbound): XML UBL only.

What customer/supplier master data is recommended to be maintained for French e-invoicing purposes?

Answer: The following identifiers are recommended to be maintained per French customer/supplier in the master data for e-invoicing purposes:

• VAT number

• SIREN number (this parameter should be maintained at minimum)

• SIRET number

We have also various tools that we offer that can help you to maintain up to date and correct master data. If off interest, please reach out.

What are the requirements to activate SAP DRC for e-invoicing/e-reporting in France?

Answer: The SAP PA France solution will be released exclusively in the EU02 region. This is a new region for SAP Document and Reporting Compliance, Cloud Edition. Reach out to your SAP Account Executive to ensure that you have this in your contract.  

Can a human-readable PDF format be added to the e-invoice?

Context: Certain customers request whether they can still receive a human-readable format, as they did previously.

Answer: Yes. It is possible to attach a human-readable PDF to the e-invoice, alongside the structured data format, so that a human-readable format remains available as before. 

Does SAP DRC offer integration with third-party AP approval tools for lifecycle reporting?

Context: Organisations may use a dedicated AP approval tool (e.g., SAP VIM,  Serrala, etc.) to manage the receipt, validation, and approval of incoming invoices. We note that these tools are typically not registered as a PA. Where an organisation uses SAP DRC as its PA for both AP and AR, the lifecycle status of incoming e-invoices must still be reported to the French tax authorities, so the acceptance or rejection of an invoice should be communicated back to SAP DRC. If the accept/reject decision is taken in the AP approval tool but no message is sent to SAP DRC, there is a compliance gap. A connection is required between the AP approval tool and SAP DRC to reflect the invoice's acceptance or rejection. The same issue applies where invoices are posted or cancelled directly in SAP S/4HANA without triggering a status update to SAP DRC.

Answer: This connection is not part of the standard SAP DRC out-of-the-box configuration. There are two main options to address this:

• Custom integration: The AP approval tool is enhanced to send acceptance/rejection status updates back to SAP DRC, enabling automated lifecycle reporting. This reduces manual effort and lowers compliance risk, but depends on the AP tool vendor's technical capability and requires additional development and integration testing. Given the complexity, this option is typically more suitable as a post-go-live improvement, particularly if the AP tool vendor provides a standard integration solution.

• Manual status update: Users manually update the invoice lifecycle status in the SAP DRC eDocument Cockpit. This requires no system changes and can be implemented immediately, making it a practical short-term solution for go-live. However, it is not scalable, involves high manual effort, and carries a greater risk of errors or delays.

We have two key lessons learned on the SAP DRC France implementation done so far:

1. Diligently check whether all required SAP OSS notes have been implemented and in the right order
2. We recommend reviewing each tax code used in France to determine whether it falls within the scope of French e-invoicing or e-reporting. This approach is commonly adopted by our clients and is essential for the correct configuration of SAP DRC. As part of a best-practice tax control framework, we also recommend periodically verifying that the appropriate tax code has been assigned to each purchase or sales document. This helps prevent transactions from being reported under the wrong requirement, for example, through e-invoicing instead of e-reporting, or vice versa.

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The French e-invoicing and e-reporting mandate is not a straightforward implementation. If you have any further questions or would like to discuss how the mandate applies to your specific situation, please reach out.