E-Invoicing in Germany: Complete Guide
Germany approves the B2B e-invoicing mandate. The obligation will be rolled out in phases, starting by January 2025. There is no digital reporting foreseen at the moment.
What is e-invoicing in Germany?
Germany introduced the obligation to issue electronic invoices in certain B2B transactions. The German Bundesrat approved the B2B e-invoicing mandate, included in the so called Growth and Opportunities Law, on 22 March 2024.
An electronic invoice is an invoice that has been issued, transmitted, and received in a structured data format which allows for its automatic and electronic processing. A structured electronic invoice contains data from the supplier in a machine-readable format, that can be automatically imported into the buyer's system avoiding manual entering.
Mandating e-invoicing in Germany implies a legislative change in the current definition of an electronic invoice, so that it exclusively refers to a structured electronic invoice. This means that a PDF sent over email will no longer be considered an e-invoice.
Have a look at our e-invoicing overview. It includes the implementation status of the mandated use of electronic invoicing in Europe.
When will e-invoices become mandatory in Germany?
Germany plans to introduce the B2B e-invoicing mandate in phases, starting by January 2025. This is the final schedule:
- January 2025: all German taxpayers must be able to receive e-invoices from their suppliers. Paper invoices can only be used with the consent of the invoice recipient. During 2025 and 2026, both the e-invoices and paper invoices will be valid.
- January 2027: taxpayers with an annual turnover exceeding EUR 800,000 will have to issue e-invoices.
- January 2028: all German taxpayers will have to issue e-invoices.
An important milestone was reached by receiving the EU authorization to implement the mandate on B2B electronic invoicing by way of derogation of articles 218 and 232 of the EU VAT Directive. German B2B e-invoicing mandate is consolidated upon the approval of the Law by the Federal Council on 22 March 2024.
Mandatory B2B e-invoicing in Germany
German e-invoicing mandate covers domestic B2B transactions made between German established company. Transactions excluded from the mandate are intra-Community transactions and simplified invoices.
In principle, the B2B e-invoicing mandate will only impact German established businesses and fixed establishments of foreign companies.
Concerning the e-invoicing format, the German B2B e-invoices must be in line with the European standard for electronic invoicing (CEN 16931) and the list of corresponding syntaxes according to Directive 2014/55/EU of April 16, 2014. This is the format proposed in ViDA. Alternatively, the e-invoice format may be different (an EDI format) if such was agreed between the supplier and customer, and provided that such format is interoperable with the EU standard.
The German proposal implies an early compliance with ViDA regulations concerning electronic invoicing: electronic invoicing will be the default system for the issuance of invoices and the issuance of e-invoices will not depend on the acceptance of the recipient.
Additionally, mandatory B2G e-invoicing has already been in place for some time in Germany, although the system is decentralized in the German federal states.
Have a look at our overview of e-invoicing in Europe. It includes the current implementation status of e-invoicing mandates across Europe.
Benefits of electronic invoicing for companies
E-invoicing provides companies with faster and simpler document processing and, consequently, faster payment, saving on paper and shipment costs, higher efficiency and automation of internal processes, as well as real-time invoice information for business management purposes.
From the tax authorities’ perspective, mandating the use of electronic invoices has the clear advantage of reducing VAT fraud, particularly if it comes in hand with a CTC measure.
Have a look at our article about electronic invoicing.
How to submit German e-invoices
Based on the current legislation, there is no reference to the implementation of digital reporting requirements or DRR connected to the electronic invoice mandate, or the introduction of other CTCs.
There are areas requiring further definition in e-invoicing implementation in Germany. The authorities want to develop their project in parallel with the Pillar 1 of the ViDA proposal on e-invoicing and digital reporting requirements. Therefore, we shall wait for further developments on a CTC implementation.