Yes, this does concern e-commerce
DOES NOT CONCERN:
- Taxable persons who have a tax exemption and those exclusively conducting operations or services that are exempt from VAT (in particular self-employed people so long as they do not exceed the fixed threshold),
- People who do not issue invoices with the PrestaShop software (e.g. your store’s orders are managed by PrestaShop but the invoices are generated by an ERP),
- Traders who only operate B2B.
Other than these cases, anyone subject to French VAT who records their customers’ payments using software or a cash register system, whether they are a natural or legal person, private or public entity, must comply with the new measures.
What is article 88?
Article 88 of the 2016 French finance law 2015-1785 of December 29, 2015 amended article 286 of the French tax code by adding paragraph 3°bis making the provision that:
“When recording customers’ payments by means of accounting or management software or a cash register system, software or a system should be used that meets conditions of inalterability, security, retention and archiving of data in order to allow checks by the tax authority, certified by an accredited organization under conditions provided for by article L. 115-28 of the consumer code or by an individual certificate from the publisher which must conform to a model set by the authority”
To be compliant, the system or software must therefore meet conditions of inalterability, security, retention and archiving:
The inalterability must guarantee the integrity of the data by preventing the user access to editing/deletion functions for validated data.
The security must guarantee tracing of all receipt records.
It must therefore no longer be possible to edit the recorded data without leaving a trace.
To meet the retention condition, it must be possible to preserve the data (full details of each transaction and payment) for six years in the software or in an archive. The software or system must also provide for closures where the sessions are cumulative (daily or monthly).
This law also introduces article 1770 duodecies to the French tax code which allows sanction by a fine of €7,500 for failure to prove, by presenting the document of compliance or certificate, the use of software or a system that meets the conditions inalterability, security, retention and archiving of data.
In the case of a fine, this article allows the subject a period of 60 days from the delivery or reception of the report to conform to the obligation provided for in article 286-I- 3 bis.
If the subject does not comply within this period, a further fine of €7,500 will be incurred.
These new measures are applicable from January 1, 2018 but the system now only concerns software and cash register systems.
The Minister of Public Action and Accounts announced in a press statement dated June 15, 2017 that this system would be simplified by restricting its scope.
Article 105 of the 2018 French finance law no. 2017-1837 of 12/30/2017 therefore amended the scope of the system established by the 2016 French finance law 2015-1785 of December 29, 2015.
Contrary to claims in some blogs and articles, the redrafting of article 286 3 bis of the tax code does not exclude VAT taxable persons who issue invoices from these new obligations but only persons who issue invoices which conform to article 289 of the tax code.
The FAQs published by the Public Finances General Directorate (DGFIP) on July 28, 2017 relating to the obligation to use secure software or cash register systems confirm that these new measures do indeed apply to e-commerce companies.
PrestaShop has been preparing for the implementation of the law for several months and its free native module is undergoing certification
As indicated in our previous communication on the subject, PrestaShop has been preparing for the implementation of these measures for several months.
It will enable its users to comply with the measures by providing a free native module for versions 1.6 and 1.7 of the solution which is currently undergoing certification.
The certification procedure has been initiated but we have not yet been informed of the date the certificate will be issued.
However, this should not be a cause of concern for PrestaShop users.
The tax authorities are committed to supporting companies in the first year of these new rules.
It has also been indicated that the compliance of software or cash register systems will be subject to a sympathetic review in order to take particular circumstances into account so long as the subject can prove due diligence.
The DGFIP indicates in the FAQs published on July 28, 2017 that “tax authority agents will be instructed to take ‘particular circumstances’ into account when applying these new measures.
This means that PrestaShop users will need to indicate that they intend, if this is the case, to install the module as soon as it is available.
In case of checks by the tax authorities, the certificate displayed by the module will be valid certification.