Germany E-Invoicing Mandate 2027: Turnover Threshold and Who Is Affected?

The Germany e-invoicing mandate requires businesses whose total turnover exceeded EUR 800,000 in the previous year to issue structured e-invoices for all domestic B2B transactions as of January 1, 2027. From January 1, 2028, this obligation applies to all businesses regardless of turnover.

Germany’s B2B e-invoicing regulation enters a new phase in 2027. All businesses have been required to receive e-invoices since 2025. In 2027, the obligation to issue e-invoices begins for companies above a specific turnover threshold. What exactly is this threshold? Which year’s turnover counts? How should foreign-owned subsidiaries in Germany and companies running their invoicing on SAP prepare? In this guide, we answer these questions based on the current legislation.

What Is the Legal Basis of the Germany E-Invoicing Mandate?

The legal basis of the German B2B e-invoicing mandate is the Wachstumschancengesetz (Growth Opportunities Act), which passed into law in March 2024. The act revised Section 14 of the German VAT Act (UStG) and clarified the definition of an e-invoice. Under this definition, an e-invoice is an invoice issued, transmitted and received in a structured electronic format that complies with the European standard EN 16931 and enables automated processing. We covered the background of the act in our guide on Germany e-invoicing requirements and SAP XRechnung.

The most important consequence of this definition: a standard PDF invoice sent by e-mail does not qualify as an e-invoice. A PDF is human-readable, but it does not contain structured data, so systems cannot process it automatically. Once the transition periods expire, paper and simple PDF invoices lose their status as proper invoices within the meaning of the UStG.

Germany E-Invoicing Timeline: What Changes in 2025, 2027 and 2028?

Germany implements the B2B e-invoicing mandate in three phases. In the first phase, the obligation to receive e-invoices took effect for all businesses on January 1, 2025. In the second phase, the obligation to issue e-invoices starts on January 1, 2027 for businesses above the turnover threshold. In the final phase, the obligation covers all businesses on January 1, 2028. The transitional rules rest on Section 27 (38) of the UStG.

Until the end of 2026, all businesses may continue to issue invoices on paper or in unstructured electronic formats, provided the recipient consents. You can review the wider European picture in our overview of e-invoicing in Germany: requirements, timeline and solutions.

What Is the Turnover Threshold for E-Invoicing in Germany?

The threshold is EUR 800,000. As of January 1, 2027, businesses whose turnover exceeded EUR 800,000 in the previous year must issue structured e-invoices for all domestic B2B sales in Germany. From that date, these businesses can no longer issue paper or simple PDF invoices.

Businesses that stay below the EUR 800,000 threshold may continue to issue paper or PDF invoices until December 31, 2027, provided the recipient agrees. For this group, the obligation to issue e-invoices starts on January 1, 2028.

How Is the EUR 800,000 Threshold Calculated, and Which Year Counts?

This is where businesses most often get the assessment wrong. For the 2027 obligation, the relevant figure is the total turnover of the previous year, meaning the 2026 financial year. Two details matter in the calculation:

• Total turnover counts. The decisive figure is the total turnover (Gesamtumsatz) within the meaning of Section 19 (2) UStG. The calculation includes the company’s entire turnover, not only its domestic or B2B revenue.
• The threshold applies year by year. A business whose 2026 turnover exceeds EUR 800,000 must issue e-invoices from January 1, 2027.

Consider a business with a total turnover of EUR 1 million in 2026, of which only EUR 500,000 comes from domestic B2B sales in Germany. Because its total turnover exceeds the threshold, this business still falls under the issuing obligation in 2027.

Who Falls Under the Germany E-Invoicing Mandate in 2027?

The issuing obligation in the 2027 phase applies to transactions that meet all of the following conditions:

• The business issuing the invoice is established (resident) in Germany.
• The invoice recipient is also a business established in Germany (a domestic B2B transaction).
• The issuing business exceeded EUR 800,000 in total turnover in 2026.

Foreign-owned companies operating in Germany through a GmbH, branch or subsidiary also fall under the mandate to the extent they meet these conditions. International groups with a German entity should assess the 2026 turnover of that German entity against the threshold.

Which Exemptions Apply Under the German E-Invoicing Rules?

The legislation grants several exemptions from the issuing obligation:

• Small-amount invoices up to EUR 250 (Kleinbetragsrechnungen): Businesses may continue to issue these on paper or as PDFs.
• Transport tickets (Fahrausweise): These remain outside the scope of the mandate.
• B2C transactions: Sales to end consumers are not subject to the e-invoicing obligation.
• Certain VAT-exempt supplies under Section 4 UStG: Invoices for specific healthcare, insurance and financial services fall outside the mandate.
• Small businesses (Kleinunternehmer): Businesses under the Section 19 UStG small business scheme are exempt from the issuing obligation. They must, however, remain able to receive e-invoices.
• Cross-border transactions: Invoices issued to foreign customers are not covered. The EU regulates cross-border transactions separately under the ViDA (VAT in the Digital Age) initiative.

A transitional rule also applies to EDI. With the recipient’s consent, EDI invoices remain valid until December 31, 2027. According to the current guidance published by IHK Frankfurt, EDI can continue beyond 2028, provided the required reporting data set can be extracted from the EDI invoice correctly and completely from January 1, 2028 onwards.

What Happens If a Business Does Not Comply?

Businesses that fall under the mandate but continue to issue paper or PDF invoices face two main risks. The tax authority can impose a fine of up to EUR 5,000 on the issuer under Section 26a UStG. The recipient, in turn, risks losing the input VAT deduction (Vorsteuerabzug) because the invoice does not meet the formal requirements. Non-compliance therefore affects both sides of the business relationship. Businesses must also archive e-invoices for 8 years.

Will Germany Postpone the 2027 E-Invoicing Deadline?

Some German industry associations are calling for a postponement of the 2027 phase. The German Confederation of Skilled Crafts (ZDH) wants the phase planned for 2027 moved to 2028. However, the legislator has not initiated any process to extend the deadline. Businesses should therefore plan against the current timeline, meaning January 1, 2027.

According to a study by Quadient and OpinionWay, around 90 percent of businesses are affected by the new rules, yet 70 percent have not completed the transition. This gap gives companies that start their preparations early a clear advantage.

Which E-Invoice Formats Does Germany Accept?

Germany accepts formats that comply with the European standard EN 16931. The most widely used formats are:

• XRechnung: Germany’s national e-invoicing standard. It is a fully structured XML format and is also used for invoicing public authorities (B2G).
• ZUGFeRD: A hybrid format. It combines a human-readable PDF/A-3 file with machine-processable XML data in a single document.
• Peppol BIS: The EN 16931-compliant international format used for exchanging invoices over the Peppol network, widely adopted for cross-border e-document exchange across Europe.

The Peppol network is becoming a core building block of Europe’s e-invoicing infrastructure. Belgium, for example, has been running its B2B e-invoicing mandate over the Peppol network since January 2026. For businesses operating in several European countries, our Peppol e-invoice solution manages the different country-specific requirements through a single connection.

How Do SAP Users Comply with the Germany E-Invoicing Mandate?

The mandate creates two core requirements for businesses that run their invoicing processes on SAP:

• Outgoing invoices: Businesses must generate the invoices they create in SAP SD and FI in XRechnung, ZUGFeRD or Peppol BIS format and deliver them to the recipient.
• Incoming invoices: Businesses must transfer the XML e-invoices they receive from suppliers into SAP, validate them, post them and archive them in line with the legislation.

Manual processes cannot meet these requirements. Keeping invoice data consistent with SAP master data, validating formats automatically and operating a reliable transmission channel all require an e-invoicing solution that is fully integrated with SAP.

MDP SAP Germany E-Invoice Solution

At MDP Group, we built the MDP SAP Germany E-Invoice solution so that you can manage your entire German e-invoicing process from within your SAP system. Your invoicing teams keep working in the SAP screens they already know, without switching to a separate portal:

• Issuing e-invoices from SAP: Our solution generates the invoices you create in SAP SD and FI directly from your SAP system in XRechnung, ZUGFeRD 2.0/2.1 or Peppol BIS format, fully compliant with EN 16931, and delivers them to the recipient.
• Automatic transfer of incoming e-invoices into SAP: Our solution transfers the XML e-invoices from your suppliers into your SAP system automatically. You can view, list and track incoming invoices from within SAP.
• End-to-end tracking inside SAP: You monitor all outgoing and incoming e-invoice movements through SAP reports. Your invoice data stays consistent with your SAP master data, and your archiving process runs integrated with SAP in line with the legislation.

Since 2013, we have delivered more than 1,100 projects with over 450 partners across 5 continents. If your 2026 turnover will exceed the EUR 800,000 threshold, we recommend planning your compliance project today so that you complete it before January 1, 2027.

Frequently Asked Questions

What is the turnover threshold for the Germany e-invoicing mandate?

The threshold is EUR 800,000. Businesses whose total turnover exceeded EUR 800,000 in the previous year must issue e-invoices for domestic B2B transactions from January 1, 2027. For businesses below the threshold, the obligation starts on January 1, 2028.

Which year’s turnover counts for the EUR 800,000 threshold?

For the 2027 obligation, the total turnover of 2026 counts. The calculation includes the total turnover within the meaning of Section 19 (2) UStG, not only domestic or B2B revenue. This distinction is decisive when you assess whether the mandate covers your business.

Does a PDF invoice count as an e-invoice in Germany?

No. A standard PDF invoice sent by e-mail contains no structured data, so it does not qualify as an e-invoice under EN 16931. Once the transition periods expire, PDF invoices lose their status as proper invoices.

Will Germany postpone the e-invoicing mandate?

Some industry associations are calling for a postponement of the 2027 phase. However, the legislator has not started any process to extend the deadline. Businesses should prepare against the current deadline of January 1, 2027.

Do small businesses have to issue e-invoices in Germany?

Small businesses (Kleinunternehmer) under Section 19 UStG are exempt from the obligation to issue e-invoices. They must, however, continue to meet the obligation to receive e-invoices, which has applied to all businesses since 2025.

Can I send e-invoices compliant with German law from my SAP system?

Yes. With the MDP SAP Germany E-Invoice solution, you can generate your invoices directly from your SAP system in XRechnung, ZUGFeRD or Peppol BIS format, deliver them to the recipient and transfer incoming e-invoices into SAP automatically.

Conclusion

The Germany e-invoicing mandate turns into an issuing obligation on January 1, 2027 for businesses above the EUR 800,000 turnover threshold. The total turnover of 2026 determines whether your business falls under the mandate. In 2028, the obligation extends to all businesses regardless of turnover. Delaying your preparations in the hope of a postponement exposes you to fines and input VAT risks. This article provides general information; we recommend consulting your tax advisor for the specific situation of your business. Contact us to plan your compliance project on SAP for the German mandate.

References

IHK Frankfurt am Main – E-Rechnungspflicht ab 2025
Börse Express – E-Rechnung: Pflicht ab Januar 2027
Ecovis KSO – E-Rechnungs-Pflicht ab 2027
IHP Media – E-Rechnungspflicht 2027

Oğuz Sayın

e-Solutions ABAP Team Lead