When a foreign parent company invoices its French subsidiary, the practical question is no longer simply whether the document may be sent as a PDF. From 1 September 2026, France’s electronic invoicing reform changes the way French taxable businesses receive and, depending on their size, issue domestic business-to-business invoices. The same group transaction may nevertheless fall under a different rule if the supplier is established abroad, if the French entity self-accounts for VAT, if goods cross a border, or if the parent operates through a French permanent establishment.

This distinction matters for a group finance team. A rejected invoice can interrupt payment, distort the French VAT return, weaken evidence for a management-fee deduction, or create a mismatch between the accounting records of the parent and the subsidiary. The decision must therefore be made transaction by transaction, using the legal status of each entity, the place of supply, the person liable for French value added tax (VAT), and the reporting channel.

This article focuses on a foreign parent billing a separate French subsidiary. It does not address the residence permit or personal relocation of an individual founder, nor does it replace a French-language company-law analysis. Its objective is operational: identify the correct channel, prepare the information required by the French subsidiary, and preserve a file that remains intelligible to the greffe (the court registry for corporate formalities), the tax administration and an auditor. For the wider incorporation sequence, see the firm’s French company formation and registered-office resource.

I. Does a foreign parent have to e-invoice its French subsidiary?

A. Which entity is actually liable for French VAT?

The first mistake is to treat “the group” as the taxable person. A French subsidiary is a company incorporated under French law, with its own legal personality, accounting records, contracts, tax returns and bank account. Its registration extract is the Kbis, the official document issued by the greffe showing the company’s identity, registered office, corporate officers and registration number. Its nine-digit SIREN number identifies the company; a fourteen-digit SIRET number identifies a particular establishment. Those identifiers belong to the subsidiary even when the parent owns 100% of its shares.

The foreign parent is a different taxable person. Its domestic tax number, legal name and registered address must not be replaced by the French subsidiary’s Kbis details merely because the parties belong to the same group. A branch, by contrast, is an establishment of the foreign company rather than a separate legal person. That difference can change the place of taxation, the invoicing flow and the party that must appear as supplier. A parent with a French branch or another French permanent establishment must have its French footprint analysed separately from a parent that has no establishment in France.

For VAT purposes, the decisive questions are factual:

• Which legal entity signed the service, supply or cost-sharing agreement?
• Where is the supplier established, and does it have a French permanent establishment that intervenes in the transaction?
• Where is the customer established?
• Is the transaction a service, a domestic supply of goods, an intra-Community acquisition, an import, an export or a financial recharge?
• Which entity is liable for VAT: the foreign parent, the French subsidiary under a reverse-charge mechanism, or an intermediary?
• Is the recipient a taxable business, a public body or a private consumer?

Article 289 bis of the French General Tax Code (the CGI, Code général des impôts) is the central domestic e-invoicing provision. The current text can be checked on Légifrance, CGI Article 289 bis. It concerns the electronic invoicing obligations of taxable persons established in France for transactions that fall within the French domestic business-to-business regime. The French subsidiary must therefore be assessed as a French taxable person, even where the invoice is issued by a related company abroad.

The administration’s English guidance gives the essential boundary for a foreign parent without a French establishment: “e-invoicing (receiving and issuing e-invoices) does not apply to foreign companies that do not have a permanent establishment in France.” That sentence does not mean that every invoice sent to France may remain outside the French reform. It means that the foreign entity’s own status must first be separated from the French subsidiary’s obligations. The exact facts and the VAT liability still determine whether transaction or payment data must be reported.

Consider three common examples.

First, a United States parent provides strategic advice to its French subsidiary from the United States. The contract is between the two companies. The French subsidiary may be the person required to account for French VAT under the reverse charge for imported services. The parent is not automatically a French domestic e-invoice issuer merely because its customer is French. The French accounting team must instead record the reverse-charge VAT, retain the contract and evidence of the service, and determine which reporting obligations apply to the transaction.

Second, an Italian parent sells stock to its French subsidiary and the goods are dispatched from Italy. This is not the same as a domestic France-to-France sale. The VAT treatment may be an intra-Community acquisition, meaning a purchase of goods moved between European Union Member States, with the French subsidiary accounting for the acquisition VAT. The commercial invoice remains important, but the group must also retain transport evidence, the VAT identification numbers, the dispatch and arrival data, and any customs or logistics documents.

Third, a foreign parent’s French permanent establishment supplies the subsidiary from France. The establishment is not a separate subsidiary, but its French intervention may bring the supply into the domestic French invoicing system. The finance team should not decide from the parent’s country alone. It must review the establishment’s French VAT registration, the contract, the actual staff and resources involved, the delivery or performance location, and the platform routing record.

The Conseil d’État’s decision of 13 December 2017, no. 397580, available on Légifrance, is a useful warning for group recharges. The court examined whether advice and central services recharged to subsidiaries corresponded to a genuine economic activity. A parent cannot protect a weak invoice merely by calling it a “management fee”; the group should be able to explain the service, the benefit to the French company, the calculation method and the supporting work.

The same evidence issue appears in the Conseil d’État decision of 26 September 2019, no. 415916, available on Légifrance. The dispute concerned intercompany services for which the taxpayer could not produce sufficiently persuasive reports, studies or other evidence of reality. The practical lesson for a foreign parent is straightforward: a compliant transmission format cannot cure an invoice for a service that nobody can prove was performed.

B. Is the transaction e-invoicing, e-reporting or a PDF invoice?

“Electronic invoice” has a specific meaning in this reform. It is not simply a PDF attached to an email. The invoice must contain structured or otherwise machine-readable data and must travel through the channel required by the French system. A PDF can remain useful as a visual copy or as a document exchanged in a transaction outside the domestic e-invoicing perimeter, but it should not be assumed to satisfy a French domestic e-invoice obligation.

Three channels must be distinguished:

• Domestic e-invoicing: the required electronic invoice is transmitted between taxable businesses in the French domestic perimeter through an approved platform.
• E-reporting: transaction data, and in some cases payment data, is sent to the French administration for transactions that are not handled as domestic e-invoices but remain relevant to French VAT.
• Ordinary cross-border documentation: a foreign parent may issue its invoice under the rules applicable to the cross-border transaction, while the French subsidiary handles reverse-charge VAT, an intra-Community acquisition, import VAT or another relevant entry in its return.

The French administration describes e-reporting as a separate obligation for certain transactions carried out by taxable persons liable for French VAT. Its English page for foreign companies without a permanent establishment explains that e-invoicing generally does not apply to that foreign company, while e-reporting can apply where a transaction is considered to take place in France and French VAT is due. The page also distinguishes transaction data from payment data. This is why the parent’s invoice format and the subsidiary’s reporting duty should be documented separately.

“The data to be e-reported is the same as that which must be sent under e-invoicing requirements”

That official explanation is available in the DGFiP guidance for foreign companies without a permanent establishment in France. DGFiP is the French Directorate General of Public Finance. The sentence is particularly useful for a group designing its data model: the foreign transaction should not be treated as an information-free exception merely because it is not routed as a domestic invoice.

Payment data has its own logic. The same DGFiP page states: “Payment data is reported by the entity that receives the payment (issuer of the invoice).” The wording is counterintuitive if the French subsidiary is the party making the payment to the foreign parent. The finance team must therefore identify who is the issuer and who receives the payment in the legal transaction, then verify whether the underlying supply belongs to the category for which payment data is required. Do not infer the reporting party from the direction of the bank transfer alone.

The timetable also depends on the type and size of the taxable person. From 1 September 2026, all businesses must be able to receive domestic electronic invoices, while large companies and intermediate-sized enterprises generally begin issuing them. Small and micro enterprises have a later issuing date, 1 September 2027, although the receiving obligation arrives earlier. An ETI is an intermediate-sized enterprise; an SME is a small or medium-sized enterprise; a TPE is a very small business. These labels are not interchangeable, and a group should test the French subsidiary’s own category rather than applying the parent’s consolidated revenue.

The official DGFiP explanation of electronic invoicing and approved platforms states that taxable businesses use approved platform services to transmit and receive electronic invoices and to send transaction and payment data to the administration. A “plateforme agréée” is an approved platform recognised by the administration. It is not simply any accounting software or enterprise resource planning (ERP) system. An ERP may prepare the data, but the group must know whether it connects to an approved platform and whether the platform can route an invoice to the French subsidiary’s registered address.

Routing depends on the central directory. Article 242 nonies H of Annex II to the CGI identifies the parties and platforms recorded in that directory; see the current Légifrance text of Article 242 nonies H. The French subsidiary should check its legal name, SIREN, establishment, VAT number and selected receiving platform before the parent’s first test invoice. A mismatch can make a valid invoice look undeliverable or send it to the wrong endpoint.

The reform also uses a recodified structure. The operational provisions of the Code of Impositions sur les Biens et Services (CIBS, the French Code of Taxation on Goods and Services) should be read with the current CGI provisions and implementing texts. For example, CIBS Article L216-42 addresses invoice timing, while CIBS Article L216-43 deals with a mandate to issue invoices on another person’s behalf. The group should record the article and version used in its implementation note rather than relying on an old software label such as “CGI 289 bis only.”

There is a useful judicial analogy in the Conseil d’État decision of 15 June 2023, no. 460576, available on Légifrance. The court distinguished formal invoice information from the substantive conditions for a VAT deduction: a missing formal mention does not automatically destroy the right where the substantive conditions are proven and the available documents allow the administration to determine that right. The principle does not authorise a group to ignore mandatory data. It does explain why a defensible correction file should show both the corrected invoice and the underlying commercial reality.

II. How should a foreign group prepare for the 1 September 2026 reform?

A. Which data, platform and evidence should the group assemble?

Preparation should begin with a transaction matrix, not with a software demonstration. Create one row for every recurring flow between the parent and the French subsidiary: management services, research and development recharges, licence fees, interest, goods, freight, insurance, secondments, cost allocations and reimbursements. For each row, identify the contractual supplier, the legal customer, the establishment that performs the work, the country from which the supply is made, the place-of-supply rule, the VAT debtor, the invoice issuer, the payment recipient and the reporting channel.

The matrix should also state whether the transaction is B2B or B2C. B2B means business-to-business; B2C means business-to-consumer. A French subsidiary is normally a legal person carrying on an economic activity, but its role in a specific flow can still affect the VAT analysis. Mark transactions involving a public entity separately, because public procurement invoicing can use a different route. Mark transactions with a non-taxable legal person separately as well.

For each row, keep the following identification fields in a controlled master file:

• the parent’s full legal name, registered address, country and local tax identification number;
• the subsidiary’s exact legal name as shown on its Kbis, registered office, SIREN, SIRET and French VAT number;
• the relevant establishment or branch, if a different SIRET performs or receives the transaction;
• the contract number, purchase order, service period, delivery date and payment terms;
• the currency, net amount, VAT rate or reverse-charge statement, gross amount and tax point;
• the bank account and payment reference, without allowing bank data to replace the legal identification of the parties;
• the approved platform address, routing identifier and technical contact for both entities, where applicable.

Article 242 nonies A of Annex II to the CGI remains a useful reference for mandatory invoice information. The version can be reviewed on Légifrance. The Code of Commerce also imposes commercial invoice requirements; the historical and transition text of Article L441-9 of the Code of Commerce is available on the same official database. In practice, include the parties’ identity and address, the invoice date and number, the service or delivery date, a precise description, quantities, unit prices, reductions, VAT information, payment date, late-payment terms and the legally required recovery indemnity wording where applicable.

Do not ask the foreign parent’s billing team to guess the French VAT wording. Give it a written instruction for each flow. If reverse charge applies, the invoice should state the correct legal treatment and the French subsidiary should keep the evidence supporting that conclusion. A generic phrase such as “VAT to be paid by customer” is weaker than a controlled template linked to the actual place-of-supply rule and VAT number verification.

For services, assemble a benefit-and-performance file. It should contain the signed intercompany agreement, a description of deliverables, time records or work papers where proportionate, meeting records, reports, licences delivered, allocation keys, the calculation of the amount, and confirmation that the French subsidiary used or could use the service. This is not bureaucracy for its own sake. In no. 415916, the Conseil d’État treated the absence of reports, studies and notes as relevant to whether claimed intercompany services were real. A parent that sends the same rounded “group support” fee every month without an allocation explanation invites questions about both VAT and corporate tax.

For goods, keep the purchase order, commercial invoice, packing list, transport document, proof of dispatch, proof of arrival, customs declaration where relevant, Incoterm, warehouse receipt and inventory entry. The French subsidiary should reconcile the goods-received record to the invoice and to the VAT return. An invoice that is technically transmitted but cannot be matched to the physical movement of the goods is still a weak control.

For licensing, financing and cost allocations, document the legal basis and the pricing logic. Interest may be exempt or subject to specific rules; royalties can raise withholding-tax and place-of-supply questions; reimbursements can be genuine pass-through costs or consideration for a service. The label “recharge” does not settle the tax treatment. Have the French subsidiary’s accounting policy identify the flow and the evidence required before the invoice is approved.

Choose the platform by testing the full chain:

1. Can the parent’s ERP create the required data without truncating French accents, VAT numbers or invoice references?
2. Can the approved platform route a domestic invoice to the subsidiary’s entry in the central directory?
3. Can the subsidiary receive, reject, correct and archive the document while preserving the original data?
4. Can the platform distinguish a domestic e-invoice from a cross-border e-reporting event?
5. Can the finance team retrieve a delivery receipt, rejection code, correction history and payment-status data?
6. Can the system export an audit file for the parent, the subsidiary, the auditor and the French tax administration?

The approved platform must preserve authenticity, integrity and readability. CGI Article 289 E on Légifrance addresses the transmission of electronic-invoice data, and CGI Article 290 B identifies approved platforms that transmit electronic invoices and the data referred to in the relevant reporting provisions. The implementing Decree no. 2026-677 of 27 July 2026 is available in full on Légifrance. The decree and its Article 10, including the directory and routing framework, should be read against the configuration delivered by the selected platform.

For a foreign parent, the platform question is often not “Does the parent need a French platform for every invoice?” The better question is “Which entity has which obligation, and where is the data produced?” The subsidiary may need a French receiving capability even when the parent sends a cross-border invoice outside domestic e-invoicing. A group can therefore need an interface between the parent’s ERP, the subsidiary’s approved platform, the accounting ledger and the VAT compliance tool without pretending that all four systems are the same legal channel.

Payment data needs a second control. The group should record the payment-status category, the date when the consideration became payable or was collected, and the person responsible for transmission. CGI Article 290 A on Légifrance is the reference for payment data in the relevant transactions. The French subsidiary should reconcile the report to the bank statement and to the accounts receivable or payable ledger, but it should not assume that the payer and the reporting issuer are automatically the same person.

The current CIBS provisions add operational detail. CIBS Article L216-45 concerns the public electronic invoicing service and the implementation framework. CIBS Article L216-46 addresses retention of the original invoice and the supplier’s duplicate, while CIBS Article L216-47 requires accounting and preservation of relevant operations. The date displayed in a Légifrance URL is not a substitute for reading the version-in-force notice, especially during the recodification of VAT provisions.

Before the first live invoice, run a controlled test with a non-production reference, then delete or isolate it in the accounting environment. The test should prove that the invoice is generated in UTF-8, that accents remain intact, that the SIREN and VAT numbers are not altered, that the routing address resolves to the correct French subsidiary, that the rejection message is actionable, and that the original and correction records are retained. Never use a production WordPress post or a public article as an invoicing test; the systems and audit risks are unrelated.

B. What should the French subsidiary do when the invoice is rejected or late?

A rejection is not a reason to post the same PDF again and hope that the issue disappears. It is a diagnostic event. The subsidiary should classify the failure into one of four layers: legal identity, VAT treatment, technical format or commercial approval. Each layer has a different owner and a different correction.

If the Kbis name, SIREN, SIRET, VAT number or platform routing identifier is wrong, stop the workflow and correct the master data. Do not change the invoice manually in the accounting ledger while leaving the directory entry wrong. Verify the subsidiary’s current registration extract, platform selection and establishment address. If the parent has used a former legal name, a former registered office or a branch identifier, retain the rejected invoice and issue a properly numbered correction or replacement according to the platform’s procedure.

If the VAT treatment is wrong, involve the French tax lead before approving the invoice. Common examples include a domestic VAT charge where reverse charge applies, a reverse-charge statement on a supply that is actually domestic, an intra-Community acquisition recorded as an ordinary purchase, or import VAT omitted from the customs reconciliation. The corrective document should identify the original invoice and explain the correction. The subsidiary’s VAT return should reflect the legally correct period, subject to the applicable correction rules.

If the format or route is wrong, ask the platform for the precise validation error and preserve the technical log. A PDF may be readable to a human and still fail because the structured data is missing, an identifier is invalid, a mandatory field is empty, or the endpoint cannot be found in the central directory. The platform should provide a delivery or rejection status. The group’s procedure should define who can correct, who can resubmit and who confirms that the replacement has not created a duplicate accounting entry.

If the issue is commercial, the parties should not solve it by changing legal information. A purchase-order mismatch, a dispute over the service period, a missing goods receipt or an unapproved management fee is a contract and controls problem. Mark the invoice as disputed, notify the parent, and record whether the tax point or payment obligation is affected. A finance team that silently changes the description to obtain approval may create a worse evidential problem than the original rejection.

Timing must be monitored on both sides. The foreign parent should issue according to the law that governs its cross-border transaction and its own jurisdiction, while the French subsidiary should observe the French receiving and reporting timetable that applies to it. CIBS Article L216-42 provides a current French reference for invoice timing, including limits linked to the triggering event or the date on which VAT becomes due. Where another entity is mandated to issue the invoice, CIBS Article L216-43 should be checked with the written mandate and acceptance process.

The group should set a month-end cut-off that is earlier than the legal deadline. At that cut-off, the French subsidiary should list services received but not invoiced, invoices received but not booked, invoices rejected by the platform, VAT numbers awaiting verification, goods in transit and payments whose status is unclear. The parent should provide a matching report. Differences should be assigned to a named person, with a target resolution date and a record of the conclusion.

Late or missing e-invoicing can result in an administrative penalty. CGI Article 1737 on Légifrance states a €15 fine per invoice for failure to issue an electronic invoice in the required form, subject to an annual cap of €15,000 for the relevant provision and subject to the statutory application dates. The amount is not the only risk. A failed transmission can delay collection, prevent a clean VAT reconciliation, and make the group’s controls look unreliable. Treat the penalty as the last line of the risk register, not as a price list for non-compliance.

The evidence file should allow a reviewer to travel from bank entry to contract, from contract to invoice, from invoice to platform receipt, and from platform receipt to VAT return. If the parent’s invoice is not a French domestic e-invoice, the file should say why: foreign supplier without a French permanent establishment, cross-border supply, reverse charge, intra-Community movement, import or another documented category. A one-page classification memo signed by the French finance lead can prevent months of uncertainty.

Judicial decisions reinforce this approach. In the Conseil d’État decision of 21 September 2020, no. 429487, available on Légifrance, the court dealt with the evidential consequences of fictitious invoices. The practical point is that the invoice’s existence is not proof that the underlying transaction occurred. For a related-party charge, the group should be able to prove the work, the goods, the benefit and the payment trail.

In the Conseil d’État decision of 1 April 2022, no. 450613, available on Légifrance, the court considered the conditions for a non-established business seeking a French VAT refund. Although a refund case is not identical to a parent-to-subsidiary invoice, it illustrates the importance of the claimant’s status, the substantive transaction and the supporting documentation. A foreign parent should not expect the French subsidiary to repair a missing foreign tax or VAT file after the fact.

Older authority can still explain how French VAT disputes are analysed. The Conseil d’État decision of 18 January 1989, no. 73084, is available on Légifrance and concerns invoice wording and the point at which VAT becomes due on a debit basis. The legal environment has changed, but the operational lesson remains: the invoice, the tax point and the accounting treatment must tell the same story.

For a foreign group’s first year under the reform, the following escalation rule is sensible:

1. Do not approve an invoice whose legal supplier, customer or VAT treatment is unknown.
2. Do not reject a transaction merely because it is cross-border; classify it using the place-of-supply and liability rules.
3. Do not treat a PDF as a French e-invoice without checking whether the transaction is inside the domestic perimeter.
4. Do not resubmit a failed document before recording the rejection reason and duplicate-control check.
5. Do not close the month until the invoice, platform status, ledger entry, VAT return and payment evidence can be reconciled.
6. Escalate uncertain related-party services, permanent-establishment questions, mixed goods-and-services flows and unusual payment arrangements to French VAT counsel.

The official DGFiP page for foreign companies states that the timing for e-reporting can depend on the category of company and the transaction. It also says: “This choice must be made before 1 September 2026 or 1 September 2027 (depending on the date on which the company will be subject to e-reporting requirements).” The date must be read in context, not copied into every group policy. Confirm the French subsidiary’s size category, the foreign parent’s establishment status, the transaction type and the applicable phase-in date.

If a foreign parent has already issued invoices using a legacy workflow, the group should perform a back-check rather than rewrite history. Sample the last twelve months by flow, identify invoices with missing VAT evidence or unclear service descriptions, reconcile them to payments and returns, and document any voluntary correction. The review should preserve the original records and clearly label any replacement document. It should not create artificial duplicate invoices in either company’s ledger.

A French subsidiary should also update its internal legal calendar. The calendar should show the receiving go-live, the issuing date applicable to the subsidiary, platform contract milestones, VAT return deadlines, annual accounts, tax instalments and the review dates for intercompany agreements. A Kbis change, a registered-office move, a new branch, a new VAT number or a change of platform should trigger a routing and master-data review. The BODACC (the official bulletin for civil and commercial announcements) may publish corporate events, but it does not replace direct verification of the company’s Kbis or platform directory entry.

Conclusion

A foreign parent does not become a French domestic e-invoice issuer simply because it invoices a French subsidiary. The correct result depends on the parent’s French establishment status, the separate legal personality of the subsidiary, the place of supply, the party liable for VAT, and whether the flow is domestic, cross-border, reverse-charged, intra-Community or connected with imports. The French subsidiary must still be ready to receive domestic e-invoices from the date applicable to it and to handle the transaction or payment data that French VAT rules require.

The safest implementation is a signed transaction matrix supported by clean Kbis, SIREN, SIRET and VAT data; a tested approved-platform route; controlled invoice templates; documented service and goods evidence; and an escalation process for rejection, correction and payment reporting. That file gives the foreign parent and the French subsidiary a common answer to the practical question: why was this document sent as a domestic e-invoice, an e-reporting event or an ordinary cross-border invoice, and where is the proof?

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