E-invoicing in Germany: New mandate to implement introduction of electronic invoices

Hands using a tablet with digital icons and German flag, representing the implementation of electronic invoicing in Germany.

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Germany will be the next European country to mandate e-invoicing. Starting January 1st, 2025, Germany will gradually introduce electronic invoicing for B2B transactions. This move follows suit with the growing trend across Europe, where other countries like Belgium, France and Poland are working towards similar mandates.

New Mandatory electronic invoicing in Germany

On June 13th, the German Federal Ministry of Finance released a draft letter to regulate the introduction of mandatory electronic invoices. This applies to transactions between German businesses starting on January 1st, 2025. This new regulation will impact only German-based businesses and fixed establishments of foreign companies.

Electronic invoicing will benefit both the government and businesses. By implementing mandatory electronic invoicing for B2B domestic transactions, the German government aims to combat tax fraud through direct input tax checks. For businesses, electronic invoicing offers a faster way to process documents. It provides better visibility into real-time information and increased process automation. Therefore resulting in a stronger competitive advantage.

A New Definition of Electronic Invoicing

The new regulation by the German Bundesrat will redefine the legislative definition of electronic invoicing. Under this mandate, an invoice will only be considered electronic if it is received in a specific format that allows for electronic processing. This format must align with the European standard for electronic invoicing (EN 16931). Alternatively, suppliers and customers can agree on a different EDI format, that must be compliant with EN 16931 standards.

Nevertheless, the format must be machine-readable and allow for the correct and complete extraction of information. Therefore, invoices received in formats that do not meet these requirements, such as JPG files or PDFs, will no longer be considered electronic invoices.

The transition to mandatory e-invoicing in Germany

To help companies transition smoothly to the new regulation, the draft letter outlines several steps for the full implementation of mandatory e-invoicing for B2B transactions.

Steps to introduce mandatory e-invoicing in Germany:

  • Starting January 1st, 2025, all e-invoices that meet the European EN 16931 standard must be accepted for all B2B transactions in Germany.
  • Certain invoices are exempt from the new requirements: B2C transactions, invoices under 250 euros, and transport costs.
  • From December 31st, 2026, paper invoices and unstructured invoices like PDFs will no longer be accepted, except for businesses with turnovers lower than €800K.

Additionally, there are a few important points to note. Customers do not need to provide formal written consent for the invoice format, acceptance of the invoice implies agreement. EDI (electronic data interchange) will be allowed after 2028 if it is EN16931 compatible. This means that Xrechnung and ZUGFeRD standards will continue to be used.

Be e-invoice ready!

Electronic invoicing will become the standard for exchanging invoices. Is your business ready for these changes? At SCANMAN, we aim to make your business future-proof. Contact us today to learn how we can help you prepare for electronic invoicing.

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