Foreign companies or their branches in France registered for VAT purposes in France have to provide the French tax authorities with their electronic accounting file. Non-resident entities registered for French VAT as well as French branches of foreign companies are not required to keep their accounts in French GAP as long as they are able to provide the French tax authorities with a correlation table between their charts of accounts and the French GAP. In case companies fail to provide the French tax authorities with their electronic accounting file, a penalty of 1500 Euros per fiscal year applies. The French tax authorities already executed such procedure after 1 January 2014 in case of companies failing to provide e-files in time.
The e-file has to include all accounting entries and related information detailed in an appendix for each fiscal year. Additionally, specific format is required. According to the tax payer’s choice the e-file could be provide under the following format:
- Flat file (CSV, .txt), with sequential organization and fielded structure which should meet the following criteria:
- Each accounting entry will be separated by the character of the return key and/or EOL key,
- The records’ length can be fixed or variable,
- The dividing character of zone possibly used must be unique and not ambiguous,
- Structured files, encoded in XML, in respect with the file XSD structure directly available online via the website “www.impots.gouv.fr”
- All entries in the accounting books relating to a fiscal year have to be set out in a single file, called the “journal of accounting entries”, in which the entries are numbered chronologically by date of accounting validation. This file will contain entries after closing operations, except centralization entries. It has to include the opening entries corresponding to the account balance at the closing of the prior year. For each entry, the following minimum information, in the same order as in the table in the next slide are compulsory.
- For flat files, the first line must include the name of the fields
Creation of the e-file is quite complex. The difficulties vary but may include:
- The correct accounting data and fields to be included into the file due to the volume of data and complexity of the system
- Identification/localization of the non-aggregated accounting entries in the system to be included in the e-file
- Difficulties or even impossibility to produce the FEC directly from the company’s general ledger software
- Generation of a unique accounting journal including all the data due to the volume of data
- Reconciliation for control purposes of the accounting entries (at non-aggregated layer) with the entries declared but under an aggregated format (tax returns)
- Ability to obtain an error-free e-file mainly due to improper data selections or extractions
It is strongly recommended to set up a process for the generation of the e-file.