Germany’s E-invoicing Mandate Updates

For QAD customers seeking to stay compliant with the latest CTC and eDocument regulations in their respective regions, here’s an insight into the changes in Germany’s introduction of the e-invoicing mandate.

Update July 2025 – The Draft Guideline for B2B E-Invoicing

On 13 June 2024, the German Ministry of Finance (MoF) unveiled a draft guideline outlining the forthcoming B2B e-invoicing mandate set to commence on 1 January 2025.

The guideline introduces several key provisions:

• Exemptions from e-invoicing requirements include tax-free services, invoices below EUR 250, and travel tickets.
• E-invoices must adhere to EN 16931 syntaxes or other agreed formats like XRechnung, ZUGFeRD (version 2.0.1 and updated 2.3 as of May 2025), Italy’s FatturaPA, and France’s Factur-X.
• Hybrid invoices with a human-readable part are allowed, but the structured electronic data takes precedence..
• Sending e-invoices via email, electronic interfaces, or portals is permitted; however, USB stick transmission is not allowed.
• Corrections must be made electronically.
• Issuers can assume recipient-provided domestic entrepreneur status unless otherwise indicated.
• Recipients unable to accept e-invoices cannot request alternative formats; issuers fulfill VAT obligations by demonstrating efforts to send e-invoices.
• Non-compliant invoices, such as PDFs or paper, are ineligible for tax deductions.

The MoF plans to implement an e-reporting system for invoice details in the future, though a specific timeline has yet to be established. The final guideline is anticipated to be released by Q4 2024.

Update March 2024: Final Parliamentary Approval

On 26 March 2024, the German parliament passed the Growth Opportunities Act, finalizing the B2B e-invoicing mandate. This followed extensive negotiations and approvals:

• The Mediation Committee resolved differences between the Bundestag and Bundesrat by 21 February 2024.
• The Bundestag approved the amended Act on 23 February, followed by the Bundesrat’s vote on 22 March.

The confirmed implementation timeline is:

• 1 January 2025: Mandatory receipt and voluntary issuance of e-invoices.
• 1 January 2027: Mandatory issuance for businesses with an annual turnover of at least EUR 800,000.
• 1 January 2028: Mandatory issuance for all remaining businesses.

Acceptable invoice formats to issue in the following years:

** Please note that exchange on EDI is permitted if the e-invoice aligns with European standards.

E-Invoicing Mandate in Germany: A Recap of Key Updates

Since its inception, there have been several revisions to the timeline and regulations regarding the implementation of the mandatory e-invoicing system Here’s a summary of the key updates to date:

1. April 2023: Initial Proposals and Feedback

On 17 April 2023, the German Federal Ministry of Finance (MoF) initiated discussions on mandatory B2B e-invoicing by sending a proposal to major business associations. The proposal included:

• A phased introduction of mandatory e-invoices for domestic B2B transactions starting 1 January 2025.
• A new definition of e-invoices based on the VAT in the Digital Age (ViDA) using structured data and the European Norm.
• Provisions for non-compliant invoices, including paper or PDF formats.

The business associations were asked to provide feedback by 8 May 2023 on the proposed timeline, organization size considerations, and exemptions.

2. July 2023: Detailed Draft and Industry Consultation

The MoF shared the draft Growth Opportunities Act with significant German business associations on 14 July 2023. Key points included:

• Mandatory electronic invoicing for domestic B2B transactions without requiring buyer consent.
• Definition of e-invoices as those complying with the European Committee for Standardization (CEN) EN 16931 standard.
• Transitional measures allowing paper invoices until the end of 2025, and non-CEN compliant e-invoices with buyer consent.

Additionally, the European Council granted Germany a derogation from the VAT Directive to implement mandatory e-invoicing from 1 January 2025 to 31 December 2027.

3. August 2023: Government Approval

On 30 August 2023, the German Federal Government approved the draft Growth Opportunities Act. The approval maintained the proposed framework but extended the voluntary phase for small companies until January 2027. Key dates were:

• 1 January 2025: Voluntary issuance of compliant e-invoices without buyer consent, with paper invoices still permitted.
• 1 January 2026: Scheduled start of mandatory B2B e-invoicing.

4. September 2023: Continued Legislative Process

By September 2023, the legislative process continued with further approvals and clarifications:

• The government reiterated the phased introduction, confirming the key dates and the extended voluntary phase.
• The upper house, Bundesrat, supported mandatory e-invoicing but proposed a two-year delay for mandatory receipt to begin on 1 January 2027.

5. November 2023: Additional Clarifications

In October 2023, the MoF provided further details on the e-invoicing mandate, emphasizing:

• Compliance requirements for the XRechnung and ZUGFeRD formats with the EN-based standard.
• Continued efforts to accommodate Electronic Data Interchange (EDI) procedures within the new framework.
• The requirement for all taxpayers to be able to receive electronic invoices by 1 January 2025.

The Bundesrat addressed these proposals on 20 October, advocating for a two-year delay for mandatory receipt. The Bundestag was scheduled to vote on the Act in mid-November, with the Bundesrat’s vote in mid-December.

How Does This Affect You?

Rest assured, as a QAD eDocument Compliance customer, you can rely on our commitment to ensuring full adherence to any ongoing changes or updates in regulatory requirements. While you may not need to delve into the technical intricacies of these changes, our dedicated team remains vigilant in tracking any alterations or delays in government implementations, ensuring seamless integration on your end. Your compliance and peace of mind are our top priorities.

For any further details or questions regarding the implementation in your region please reach out to your QAD Customer Success Manager.

*Provided updates stem from our esteemed partner, SOVOS. As a leading provider of tax compliance solutions, SOVOS offers unparalleled expertise in navigating regulatory landscapes worldwide. With their insights, you can trust in the accuracy and reliability of the information presented.