Draft Regulation for Mandatory B2B e-Invoicing Published
In preparation for the upcoming electronic invoicing mandate for business-to-business transactions, Germany's Ministry of Finance released a draft regulation for public comment on June 13, 2024.
The initial requirement, taking effect January 1, 2025, focuses on recipient readiness. As of that date, all resident taxpayers must be equipped to receive structured e-invoices for domestic B2B transactions.
The letter outlines:
- Current legislative landscape – implementation of the Growth Opportunities Act
- Types, formats, and requirements for issuing e-invoices starting January 1, 2025
- New criteria for a machine-readable structured e-invoice under the EN 16931 EU standard or mutually agreed upon by counterparties, ensuring security, with some exemptions for values below €250
- Hybrid formats like XStandard and ZUGFerd are acceptable
- Attachments can be included to facilitate the addition of contracts or similar agreements
- Electronic transmission of structured e-invoices can be done via email, portals, or service providers. Physical exchanges like flash drives are not allowed. Setting up an email inbox to receive and store structured e-invoices will comply with the January 2025 requirements
- Considerations for input VAT deduction, as only structured e-invoices meeting the above criteria are valid
- Storage considerations
- Transition stages (below table)
Transition to mandatory B2B e-invoicing in Germany
| 2024 | 2025 | 2026 | 2027 | 2028 | |
| Paper | Allowed | Allowed | Allowed | Allowed for Turnover <800k EUR | Not Permitted |
| Compulsory Acceptance of structured invoices and interoperable formats | Subject to acceptance | Allowed | Allowed | Allowed | Allowed |
| Other interoperable or enabling extraction with CEN | Subject to acceptance | Subject to acceptance | Subject to acceptance | Subject to acceptance | Subject to acceptance |
| Unstructured e-invoices (PDF) | Subject to acceptance | Subject to acceptance | Subject to acceptance | Allowed for Turnover <800k EUR | Not Permitted |
| EDI unstructured invoices | Subject to acceptance | Subject to acceptance | Subject to acceptance | Subject to acceptance | Not Permitted |
March 2024: German B2B E-Invoicing Law Officially Published Following Bundesrat Approval
Germany officially published the Growth Opportunities Act (Wachstumschancegesetz) on March 27, 2024, after receiving consent from the Bundesrat (Federal Council) on March 22. This comprehensive economic stimulus bill, previously approved by the Bundestag, mandates a phased introduction of domestic B2B e-invoicing from 2025 to 2028.
Significantly, the German e-invoicing framework only dictates the standard for domestic B2B invoices. It does not yet include government pre-clearance or post-issuance digital reporting. These elements are expected to be introduced around 2030 with the EU VAT in the Digital Age digital reporting requirements for intra-community transactions. The current German XRechnung and ZUGFeRD standards will remain in use as long as they are compatible with the new regulations.
EU Council Endorses Mandatory German E-Invoicing
The Council of the European Union approved Germany's request, made by the European Commission, to implement mandatory domestic B2B VAT e-invoicing on July 25.
The European Commission supported this request in June, authorizing Germany to deviate from the EU VAT Directive, which mandates paper-based invoices. Germany is permitted to enforce e-invoicing until the end of 2027, after which a review will occur.
However, the EU plans to eliminate the requirement for such approvals for e-invoicing deviations from the EU VAT Directive starting January 2025, delayed as part of the ViDA reforms.
There’s more you should know about e-invoicing in Germany – learn more about the new and upcoming regulations.
