Electronic invoicing in construction: subcontracting, VAT reverse charge and work statements

Why construction is a special sector in the electronic invoicing reform

Since the mandatory calendar for large enterprises came into force in September 2026, electronic invoicing is progressively being imposed across the entire French economic landscape. However, the building and civil engineering (construction) sector has specific characteristics that make it one of the most complex cases to understand. Between multi-level subcontracting chains, monthly work statements, VAT reverse charge and public contracts subject to their own rules, construction companies must combine regulatory compliance with the operational reality of the construction site.

According to the Fédération Française du Bâtiment (FFB), more than 60% of construction sites involve at least one subcontractor. In this context, each invoicing flow — whether it goes from the subcontractor to the main contractor or from the latter to the client — must now pass through an approved Electronic Data Interchange Platform (EDI Platform) or through the Public Invoicing Portal. Understanding the rules applicable at each level is therefore a priority to avoid tax disputes and payment blockages.

The mandatory timeline for construction companies

The calendar defined by Ordinance No. 2021-1190 of 15 September 2021 and clarified by the 2024 Finance Law applies to construction companies according to their size:

• Large enterprises and mid-market enterprises: obligation to issue and receive from September 2026.
• SMEs and micro-enterprises: deferred obligation to issue, but obligation to receive from September 2026. These companies must therefore be able to receive electronic invoices in structured format (Factur-X, UBL or CII) even if they do not yet issue them.

For subcontractors, often small craft businesses, this obligation to receive is immediate and concrete: they must equip themselves with a compatible solution to avoid blocking their principal's flows.

Electronic invoice formats accepted in construction

Construction can use the three structured formats accepted by the tax authorities:

• Factur-X: Franco-German hybrid format (PDF enriched with an XML file). This is often the most accessible for building SMEs. You can consult our complete guide on the Factur-X format to understand the required compliance levels.
• UBL 2.1 (Universal Business Language): international standard, used notably in public procurement via Chorus Pro.
• UN/CEFACT CII (Cross Industry Invoice): pure structured format, oriented towards complex B2B exchanges.

The choice of format must be coordinated with the main contractor or client upstream of the construction project.

VAT reverse charge in construction subcontracting: mechanism and implications for electronic invoicing

VAT reverse charge is at the heart of relationships between main contractors and subcontractors in construction. This mechanism, provided for in Article 283, 2 nonies of the General Tax Code (CGI), stipulates that VAT on construction work performed by a subcontractor shall not be collected by the latter but paid directly by the main contractor (or the taxable person).

How reverse charge modifies the structure of the electronic invoice

In this scheme, the invoice issued by the subcontractor must not show any VAT. It must mandatorily include:

• The legal mention: "Reverse charge — Article 283-2 nonies of the General Tax Code"
• The applicable VAT rate (even if the amount is zero on the invoice)
• The nature of the works and their attachment to the construction project
• References to the subcontracting contract and the client's acceptance

In the context of structured electronic invoicing, this information must be encoded in the corresponding XML fields. The VAT reason code AE (Reverse charge) must appear in the `TaxCategory` node of the structured file. Any omission or error in this encoding can result in automatic rejection of the invoice by the recipient's EDI Platform, or even a tax audit.

It is strongly recommended to test your files with a free Factur-X validator before any production deployment.

Strengthened reporting obligations through e-reporting

VAT reverse charge in subcontracting creates obligations to transmit information to the tax authorities via the e-reporting mechanism. The main contractor who applies reverse charge must declare this transaction in their VAT return (CA3) and, if applicable, transmit transaction data to the authorities via their EDI Platform. This dual traceability — in the structured invoice and in the e-reporting flow — constitutes a major innovation for construction, accustomed to more manual reporting practices.

Work statements: construction-specific feature and electronic processing

The work statement is a document specific to the construction sector. It is a periodic progress statement (usually monthly) that records the work completed, determines the amount due for the period and serves as an intermediate payment request. It is not an invoice in the classical accounting sense, but within the framework of the electronic invoicing reform, its processing is crucial.

Work statement and electronic invoice: what relationship?

According to the Direction Générale des Finances Publiques (DGFiP), the work statement can be treated as a periodic invoice provided it meets the criteria defined in Article 289 of the CGI: identification of the parties, description of services, net amount, VAT rate and amount (or mention of reverse charge), date and sequential number.

In construction practice, this means that each monthly statement issued by a subcontractor to the main contractor must:

1. Be issued in structured format (Factur-X, UBL or CII) via an EDI Platform.
2. Include the mention of reverse charge if the subcontractor is subject to the mechanism of Article 283-2 nonies.
3. Be accompanied by the final and definitive statement (DGD) at the end of the project, which settles all intermediate statements.

Managing retention bonds in construction electronic invoices

Law No. 71-584 of 16 July 1971 authorises the client to retain 5% of the amount of each work statement as a guarantee of proper performance. This retention must appear in the electronic invoice in an explicit manner.

In the Factur-X format, the retention bond is encoded in the deduction elements (`AllowanceCharge` with "deduction" type indicator). Omitting this encoding in the XML file — even if the surface PDF is correct — constitutes non-compliance likely to trigger rejection by the payer's EDI Platform. Accounting software editors for construction (EBP, Sage, Chorus Pro) are progressively integrating these fields, but human verification remains essential during the transition phase.

Choosing your EDI Platform and tools: specific issues for construction companies

Choosing the Electronic Data Interchange Platform is a strategic decision for any construction company. Unlike other sectors, construction companies often manage multiple projects simultaneously, with multi-level invoicing flows (client → general contractor → subcontractors → sub-subcontractors).

Selection criteria for an EDI Platform suited to construction

For a building company, the differentiating criteria are as follows:

• Native management of construction codes: the EDI Platform must allow you to include NACR codes (Construction Activities Nomenclature) in structured invoices.
• Support for VAT reverse charge: the EDI Platform must automatically manage construction-specific VAT rules (reduced rate 10% for renovation, reverse charge, 20% VAT).
• ERP/construction accounting connectors: interoperability with software such as Sage 100 Construction, EBP Building or Onaya is essential.
• Storage with probative value: construction site documents must be kept for 10 years under civil law (ten-year guarantee). The EDI Platform must provide storage compliant with NF Z42-013 standard.

For small craft businesses, the free Factur-X electronic invoice generator can be a first step before migrating to a complete solution.

Integration of electronic signature in construction flows

The electronic invoicing reform should not be separated from electronic signature, which secures the entire documentary chain of the construction site: subcontracting contracts, service orders, amendments, acceptance records. The legal value of electronic signature is fully recognised for these documents provided it complies with the eIDAS regulation. In construction, where disputes related to work performance are frequent, qualified electronic signature provides irrefutable proof of acceptance of contractual conditions.

Legal framework applicable to electronic invoicing in construction

Compliance with electronic invoicing in the construction sector is based on a complex set of legislative and regulatory texts that must be mastered.

General Tax Code (CGI)

• Article 289: defines the mandatory details of any invoice issued by a taxable person, now applicable to structured electronic invoices.
• Article 283, 2 nonies: establishes the VAT reverse charge mechanism for immovable construction work performed by subcontractors. The taxable person is liable for VAT in place of the subcontractor.
• Article 289 bis: sets the conditions for resorting to electronic invoicing and accepted formats.

Ordinance No. 2021-1190 of 15 September 2021: empowers the government to generalise electronic invoicing between taxable persons. Clarified by Decree No. 2022-1299 of 7 October 2022.

2024 Finance Law (Article 91): adjusts the deployment timeline and confirms the obligation of universal receipt from September 2026.

Law No. 71-584 of 16 July 1971: governs the 5% retention bond applicable to private construction contracts. Its application in structured electronic invoices must comply with dedicated XML fields.

eIDAS Regulation No. 910/2014 and eIDAS 2.0 (EU Regulation 2024/1183): regulate electronic signatures and electronic seals used to authenticate invoices. Qualified signatures (QES) provide the irrebuttable presumption of integrity required for evidential storage.

VAT Directive 2006/112/EC as amended: harmonises at European level the rules for VAT reverse charge in high-risk fraud sectors, including construction. Article 199 of the directive underpins Article 283-2 nonies of the French CGI.

ETSI Standard EN 319 132: defines advanced signature profiles XAdES, CAdES and PAdES, applicable to electronic invoice formats to guarantee their integrity and non-repudiation over time.

GDPR No. 2016/679: personal data contained in invoices (signatory name, contact details of sole traders) must be processed and archived in compliance with GDPR, with limitation of retention periods to strictly necessary legal and accounting purposes.

Risks in case of non-compliance: an invoice not issued in the regulatory format can be rejected by the recipient, cause a payment delay and expose the issuer to a tax penalty of €15 per non-compliant invoice (capped at €15,000 per financial year for issuers, under Article 1737 of the CGI). For construction subcontractors, an error in the encoding of VAT reverse charge can trigger a VAT adjustment charge to the main contractor, accompanied by surcharges of 10% to 40% depending on the nature of the breach.

Use cases: electronic invoicing in construction practice

Scenario 1 — A mid-market civil engineering company with multiple levels of subcontracting

A public works company with approximately €80 million in annual turnover acts as main contractor on road projects for local authorities. It engages about twenty specialist subcontractors (earthworks, road marking, asphalt) of which the majority are SMEs with fewer than 50 employees.

Before the reform, monthly work statement management was handled by unstructured PDFs and paper purchase orders. Since September 2026, the company is subject to the issuing obligation. It has implemented an EDI Platform connected to its construction ERP to issue invoices to public clients (via Chorus Pro) and private clients. It has also contractually required its subcontractors to equip themselves with a compatible solution for sending their monthly statements in Factur-X.

Result after 4 months of deployment: 35% reduction in work statement validation times (from 12 days to 8 days on average), elimination of disputes related to VAT errors (reverse charge automatically encoded by the ERP) and estimated savings of 1,200 accounting entry hours annually.

Scenario 2 — A craft electrical subcontractor facing the obligation to receive

A small electrical contracting business with 8 employees works exclusively as a subcontractor for two regional main contractors. Its annual turnover is €900,000 net, composed 100% of work subject to VAT reverse charge.

Although its obligation to issue is deferred (micro-enterprise), it is subject to the obligation to receive from September 2026. Its principals now issue service orders and purchase orders in structured format. The contractor has subscribed to a lightweight SaaS electronic invoicing solution (around €30/month) allowing it to:

• Receive and archive incoming flows from its principals.
• Generate its own monthly statements in Factur-X with pre-configured VAT reverse charge.
• Automatically transmit data to its accountant.

The estimated time saving is 3 to 4 hours per month on invoicing, with near-total reduction of VAT errors.

Scenario 3 — A property developer coordinating a construction site

A property developer managing 5 to 8 new construction projects annually (multi-unit residential buildings) coordinates an average of 30 contributing companies per site. It is the client and, as such, must receive electronic invoices from all its main contractors, who themselves receive statements from their subcontractors.

The developer has deployed an EDI Platform with a construction contract management module allowing it to automatically reconcile each received invoice with the original contract, verify the compliance of the retention bond (5%) and detect attempts at invoicing outside the contractual scope. It has reduced its contentious payment instances by 40% in 6 months thanks to automatic flow traceability.

Conclusion

The electronic invoicing reform represents a structural turning point for the construction sector. Between VAT reverse charge, management of work statements, retention bonds and multi-level subcontracting chains, construction companies face one of the most demanding compliance migrations of this reform. Anticipating now — by choosing a suitable EDI Platform, training accounting teams and imposing standards on subcontractors — is the only way to avoid invoice rejections and costly tax disputes.

Certyneo supports construction companies in their transition to compliant electronic invoicing, combining qualified electronic signature, Factur-X generation and storage with probative value. Discover our offers and get started with no commitment by consulting our pricing or by testing our compliance assessment.