French Use Case n°31:
"Mixed" invoices showing a main transaction and an accessory transaction
This case study illustrates the management of "mixed" invoices/transactions or "single complex transactions" (involving several transaction categories, one of which is incidental to the other). The transaction category is either a delivery of goods or a provision of services.
In accordance with Article 257 ter II of the General Tax Code, these are activities whose components are so closely linked that they objectively form a single inseparable economic service, the breakdown of which would be artificial.
Principle :
If an invoice mentions two operations: a first operation considered to be the main operation of the transaction, and a second operation considered to be a secondary operation (associated with the main operation). The way in which billing/transmission and payment data are transmitted for these two operations is determined by the category of the main operation. In fact, payment data need only be transmitted for transactions in the service category, in order to determine the VAT base.
For e-reporting not linked to an invoice, and outside the 10.1 invoice data transmission flow, it is up to the issuer to define the transaction category (delivery of goods or provision of services) for the transmission of transaction data.
In e-invoicing: a mandatory note on the invoice will indicate the category of operation.
Example:
In addition to the sale of its products, a clothing boutique offers a made-to-measure alteration service. Transactions are carried out on a cash basis, with immediate collection. They are recorded by a software or cash register system.
Payment data must be transmitted for transactions in the SP category in order to determine the VAT base:
If, following its sale, a product needs to be retouched, the retouching is considered incidental to the sale.
It will therefore not be the subject of an e-reporting payment declaration.
If a customer wishes to have a garment altered (purchased as part of another transaction), then this alteration will be considered as the main transaction and will be subject to an e-reporting of payment for the services invoiced (excluding the option to pay VAT on debits).
Case 1: Retouching is associated with the sale of a costume. The main transaction is a delivery of goods
Figure 32: Mixed invoice with main and accessory operations categorized as a sale (case of a sales touch-up)
Case 2: retouching is the main operation of the transaction (with or without ancillary sales). The operation is a service
Figure 33: Invoice with main operation = PS (case of rework with or without sale)
The specificities of billing/transaction and payment data transmission are :
Transmission of an e-report of cumulative transaction data (flow 10.3) recorded by the cash register software, by category of transaction carried out (see rule G1.68 in appendix 7);
Transmission of an e-report of cumulative payment data (10.4) recorded by the cash register software for transactions in the service category (TPS1) only.
Point of attention no. 1: Invoices for "mixed" operations should be distinguished from invoices for "double" operations, i.e. an invoice that includes both a delivery of goods and a provision of services. Although a category of double transactions is included in the compulsory data to be sent to the authorities, to take account of operators' practices, it is recommended that, wherever possible, separate invoices be issued for goods and services, given the different rules governing liability, in order to identify which transactions are covered by the payment e-reporting.
Note 2: This case should also be distinguished from the sale of "packages" comprising elements subject to a separate VAT regime. In this case, as the EU standard and the UBL and CII formats stand, each item must be treated separately on the invoice (e.g.: in the case of the sale of a toy book, one invoice line must be used for the book and one for the toy).
Background
Management of mixed invoices (goods AND services)
French Use Case n°31: "Mixed" invoices showing a main transaction and an accessory transaction
This case study illustrates the management of "mixed" invoices/transactions or "single complex transactions" (involving several transaction categories, one of which is incidental to the other). The transaction category is either a delivery of goods or a provision of services.
In accordance with Article 257 ter II of the General Tax Code, these are activities whose components are so closely linked that they objectively form a single inseparable economic service, the breakdown of which would be artificial.
Principle :
If an invoice mentions two operations: a first operation considered to be the main operation of the transaction, and a second operation considered to be a secondary operation (associated with the main operation). The way in which billing/transmission and payment data are transmitted for these two operations is determined by the category of the main operation. In fact, payment data need only be transmitted for transactions in the service category, in order to determine the VAT base.
For e-reporting not linked to an invoice, and outside the 10.1 invoice data transmission flow, it is up to the issuer to define the transaction category (delivery of goods or provision of services) for the transmission of transaction data.
In e-invoicing: a mandatory note on the invoice will indicate the category of operation.
Example:
In addition to the sale of its products, a clothing boutique offers a made-to-measure alteration service. Transactions are carried out on a cash basis, with immediate collection. They are recorded by a software or cash register system.
Payment data must be transmitted for transactions in the SP category in order to determine the VAT base:
It will therefore not be the subject of an e-reporting payment declaration.
Case 1: Retouching is associated with the sale of a costume. The main transaction is a delivery of goods
Figure 32: Mixed invoice with main and accessory operations categorized as a sale (case of a sales touch-up)
Case 2: retouching is the main operation of the transaction (with or without ancillary sales). The operation is a service
Figure 33: Invoice with main operation = PS (case of rework with or without sale)
The specificities of billing/transaction and payment data transmission are :
Point of attention no. 1: Invoices for "mixed" operations should be distinguished from invoices for "double" operations, i.e. an invoice that includes both a delivery of goods and a provision of services. Although a category of double transactions is included in the compulsory data to be sent to the authorities, to take account of operators' practices, it is recommended that, wherever possible, separate invoices be issued for goods and services, given the different rules governing liability, in order to identify which transactions are covered by the payment e-reporting.
Note 2: This case should also be distinguished from the sale of "packages" comprising elements subject to a separate VAT regime. In this case, as the EU standard and the UBL and CII formats stand, each item must be treated separately on the invoice (e.g.: in the case of the sale of a toy book, one invoice line must be used for the book and one for the toy).
NOTE: The text/pictures of this use case no. 31 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)