French Use Case n°20 and 21:
Down-payment invoice and final invoice after down-payment
A payment on account for a purchase or the provision of a service implies a firm commitment by both parties and constitutes a deposit. All taxable persons are required to issue an invoice for down-payments (article 289-I.1.c of the CGI) before any of the transactions referred to in a and b of 1 of I of the same article are carried out (unless an exception is expressly provided for). VAT is payable on receipt of the deposit for both supplies of goods and services.
The buyer pays an initial instalment on the sum due for a purchase of goods or services. For example, when a company hires the services of a removal company, it must pay part of the total sum before the move is carried out. The moving company issues a deposit invoice, and a final invoice after the deposit has been paid.
Figure 23: Down-payment invoice and final invoice after down-payment
The specific characteristics of the data and associated management rules are :
The down-payment invoice must mention :
Invoice type (BT-3) : 386 : Down payment invoice
A billing frame (BT-23) :
If it's a deposit invoice not yet paid, use the codes :
B1: Submission of a goods invoice
S1: Submission of a service invoice
M1: Submission of a double invoice (delivery of goods and provision of services that are not incidental to each other)
If this is a prepaid invoice, use codes: :
B2: Deposit of an invoice for goods already paid
S2: Deposit of a previously paid service invoice
M2: Submission of a double invoice already paid
The final invoice must show :
Invoice type (BT-3) : 380 : Commercial invoice
A billing frame (BT-23) :
B4: Submission of final invoice (after deposit) for goods
S4: Submission of a final invoice (after deposit) for services
M4: Submission of a double final invoice (after deposit)
The total tax base and VAT amount must correspond to the tax base and the relevant VAT still due, i.e. after deduction of the advance payment and the relevant VAT, in order to avoid increasing the tax base:
It is advisable to include this information in the invoice lines (Block REFERENCE LINES FACTURE ANTERIEURE - EXT FR FE BG 06) and to inform the stakeholders and be able to determine the correct VAT base and amount. Nevertheless, to circumvent certain limitations (particularly in terms of accounting management), it is possible to indicate the amount of the advance payment, exclusive of VAT, in the invoice note, so that the company can take the total amount of the operation into account in its accounting.
If the down payment is not included on the invoice lines, the VAT on the down payment will be taken into account twice: a correction of the pre-filled VAT return will then be essential.
Down payment invoice reference and date (BT-25 and BT-26)
Optional: Amount already paid on account (BT-113)
Outstanding amount incl. VAT (BT-115): processing this data is not compulsory, but it makes the invoice easier to read.
N.B.: In the case of final invoices, a distinction must be made between the mandatory information on invoices (flow 2) and the data to be transmitted to the authorities (flow 1), in particular payment data. Thus, the down payment must be included on the final invoice, whether for goods or services (the invoicing frame is B4 for a final invoice for the sale of goods), with the same tags as those mentioned above (BT-25, BT-26, BT-113, BT-115).
On the other hand, the French tax authorities are unable to impose the transmission of data relating to the down payment on deliveries of goods in the payment e-reporting system under the current legislation.
GT PUBLISHERS June and July: specify that the precise name and date of payment of the deposit are compulsory but remain optional since they must be determined on the day the invoice is issued.
+ see PAYMENT DATE field for exchanges with CyS (no need for extension).
+ in the case of a down-payment not paid by the date of issue of the final invoice, perhaps specify that it should not appear on the final invoice, or in any case that it should not reduce the total VAT base and amounts.
The specifics of the life cycle or process are :
Transmission of stream 1 and, if applicable (PS), e-reporting of payment data concerning the down payment invoice by the supplier's platform,
Transmission of stream 1 and, where applicable (PS), e-reporting of payment data concerning the final invoice by the supplier's platform.
The services offered by PPF are :
Parties connected to the PPF will be notified if the invoice status changes
The steps in cases 20 and 21 are :
Step
Stage name
Responsible player
Description
1
Invoice creation
Supplier
The invoice is created by the supplier and sent to the buyer. At the same time, a flow 1 is sent by the supplier's PDP 1 to the PPF.
2
Receiving stream 1
PDP
Supplier
3
Receipt of invoice
Buyer
The buyer receives the invoice, processes it and updates the invoice status according to the lifecycle procedure. The buyer then pays the invoice to the supplier, and updates the status as required via the PDP.
4
Processing and updating bylaws
5
Invoice payment and update
optional/recommended
articles of association
6
Receipt of invoice status
Supplier
The supplier receives the invoice status via his MPS and collects the invoice. He then updates the status to "cashed".
7
Collection
8
Go to à update at status
"cashed
9
Reception from status
"cashed
Buyer
The buyer's PDP 2 provides him with the invoice's "cashed" status.
10
Receiving e-reporting feeds
payment details
PPF
The supplier's PDP 1 accordingly sends the payment e-reporting flow to the PPF.
edmundgray
commented
8 months ago
Background
Final invoice after advance payment
French Use Case n°20 and 21: Down-payment invoice and final invoice after down-payment
A payment on account for a purchase or the provision of a service implies a firm commitment by both parties and constitutes a deposit. All taxable persons are required to issue an invoice for down-payments (article 289-I.1.c of the CGI) before any of the transactions referred to in a and b of 1 of I of the same article are carried out (unless an exception is expressly provided for). VAT is payable on receipt of the deposit for both supplies of goods and services.
The buyer pays an initial instalment on the sum due for a purchase of goods or services. For example, when a company hires the services of a removal company, it must pay part of the total sum before the move is carried out. The moving company issues a deposit invoice, and a final invoice after the deposit has been paid.
The specific characteristics of the data and associated management rules are :
N.B.: In the case of final invoices, a distinction must be made between the mandatory information on invoices (flow 2) and the data to be transmitted to the authorities (flow 1), in particular payment data. Thus, the down payment must be included on the final invoice, whether for goods or services (the invoicing frame is B4 for a final invoice for the sale of goods), with the same tags as those mentioned above (BT-25, BT-26, BT-113, BT-115).
On the other hand, the French tax authorities are unable to impose the transmission of data relating to the down payment on deliveries of goods in the payment e-reporting system under the current legislation.
GT PUBLISHERS June and July: specify that the precise name and date of payment of the deposit are compulsory but remain optional since they must be determined on the day the invoice is issued.
+ see PAYMENT DATE field for exchanges with CyS (no need for extension).
+ in the case of a down-payment not paid by the date of issue of the final invoice, perhaps specify that it should not appear on the final invoice, or in any case that it should not reduce the total VAT base and amounts.
The specifics of the life cycle or process are :
The services offered by PPF are :
The steps in cases 20 and 21 are :
Step
Stage name
Description
PDP
Supplier
Buyer
The buyer receives the invoice, processes it and updates the invoice status according to the lifecycle procedure. The buyer then pays the invoice to the supplier, and updates the status as required via the PDP.
5
Invoice payment and update
optional/recommended
articles of association
Supplier
The supplier receives the invoice status via his MPS and collects the invoice. He then updates the status to "cashed".
Go to à update at status
"cashed
Reception from status
"cashed
Receiving e-reporting feeds
payment details
NOTE: The text/pictures of this use case no. 20 and 21 were taken from the French government site! The text was extracted from V2.3 - deepl English DOCX and any pictures were taken from V2.2 - original English PDF)