From 1 September, electronic invoicing will be gradually introduced for all companies subject to VAT. Presented as a simplification measure, this reform risks complicating the daily lives of SMEs and the self-employed, while at the same time exposing the administration to a significant amount of business data.
The inability of the French state to balance its expenditures is now well known. At an emergency government meeting on July 6, two official secrets were made.
On the one hand, the goal of keeping the government deficit below 5% this year, which is already quite ambitious compared with the 3% threshold we have committed to since 1992, is likely to be missed. The government is now assessing “difficult” keep this commitment at a discount.
On the other hand, even if we let our debt disappear, we will have to accumulate billions of euros to avoid an acceleration in growth. In addition to the 6 billion euros in savings already presented in April, another 3 billion needs to be found (including 1 billion for social benefits). Despite these efforts, the exponential growth of our debt will continue: in fact, savings of around 125 billion euros will be required to stabilize our public debt, according to a report commissioned by Bercy and published last week.
In this context, economists agree that reducing the weight of the state in the daily lives of economic actors and in GDP is critical. Streamlining trade, limiting efficiency losses and encouraging value creation must be an absolute priority at a time when our country faces an urgent need to produce more wealth before being able to redistribute it.
The government plans to take a decisive blow in the coming months on these three issues… but by doing the opposite of what economists recommend to fix the country’s situation. Instead of encouraging entrepreneurship and making life easier for economic agents, it introduces a new coercive measure through a new administrative gas plant: electronic invoicing.
Electronic invoicing – a new twist in entrepreneurship
From 1 September 2026, all companies subject to VAT must be able to receive electronic invoices through an approved platform, and large companies and ETIs must also issue invoices using this method.
Goodbye to paper invoices or simple PDFs sent via email. From the humble sole trader billing over €37,500 per year for services, to the CAC 40 group, using an approved invoice distribution platform will become mandatory.
This additional administrative complexity will create another barrier to the creation of new activities. Large companies that have an army of accountants will have no problem adding this extra step. On the other hand, SMEs and self-employed people will have to further reduce their effective working hours to integrate this new restriction. Inevitable mistakes will become sources of loss of earnings or even administrative sanctions.
Added to this loss of efficiency and competitiveness that small businesses will suffer is the risk that some players will exit. Noting that in addition to the exchange of Urssaf, VAT and CFE returns, it is now necessary to add real-time communication with tax authorities through a private platform until an unknown number of would-be entrepreneurs simply give up. Although our employment rate among young people aged 15–64 is one of the lowest in Europe (68.8% compared to 77% in Germany, 82.3% in the Netherlands and 72.8% in Portugal), the worst measure is adding new restrictions for citizens who want to start a small business without relying on government largesse.
A few winners for millions of losers
Representatives of the accounting profession clearly welcome this reform, which for them will “create activity”.
But this new windfall for accounting professionals represents primarily a one-time transfer of wealth with the destruction of total value. Forcing citizens to solve problems created from scratch does not create wealth: otherwise, it would be enough to hire 5 million government workers to dig holes and 5 million others to fill them, and our country would be rich and in a situation of full employment.
But within our borders, where making others pay has never been a taboo, this basic economic truth goes unheard of.
The state, for its part, has already supported the situation. In the latest Finance Law, the fines for issuing non-electronic invoices have been tripled: from 15 euros each to 50 euros. Citizens will appreciate the irony of changing the penalties imposed for offenses that have never been committed before… And with more than a quarter of SMEs yet to implement steps to move to electronic invoicing, the current risk of recovery across the country is estimated at €17.2 billion – an amount so large that it will in practice be impossible to recover, a sign that the planned sanctions do not match the real situation.
Major violation of trade secrets
The measure also raises serious questions about respect for privacy. The reform introduces special transfer rules (called electronic reporting) for all sales to individuals, starting with the first cent. If the anonymity of individuals is maintained at this time, the full account, including the SIREN number and the name of the client company, must be transmitted non-anonymously to the State Platform. In this way, all commercial exchanges between French companies will be present in the database entrusted to our administration.
However, the chronic failure of our administrations to ensure the security of the data they collect is glaring. In January, an intrusion on Urssaf servers allowed the confidential data of 12 million people to be recovered. In April, the systems of the National Agency for the Protection of Property Rights (sic) were hacked, resulting in the theft of identity data (surnames, first names, dates of birth, login IDs and email addresses) of 11.7 million people. In the same month, the EduConnect portal used by National Education to access online services for schools and secondary schools suffered a major breach of its IT systems.
There is no doubt that foreign industrialists, computer hackers and hostile governments will eagerly watch the creation of a database that will centralize by name all commercial exchanges in our country.