e-Invoicing in Germany: Requirements, Timeline and Solutions

Germany first introduced electronic invoicing for Business to Government (B2G) transactions in 2020. XRechnung, ZUGFeRD or Peppol BIS formats were introduced to comply with the legislation. Now e-invoicing is becoming mandatory for B2B transactions. Under the Wachstumschancengesetz (Growth Opportunities Act), e-invoicing will gradually become mandatory for all businesses in Germany from January 1, 2025. In this blog, we will detail the Germany e-invoice obligation and the transition process for companies. 

What is an Electronic Invoice in Germany?

According to the Growth Opportunities Act, e-invoices are invoices issued, sent and received in a structured electronic format. e-Invoices require the use of the structured data format XML.

What are the German e-Invoicing Formats?

The accepted invoice formats for e-invoicing in Germany are XRechnung, ZUGFeRD and Peppol BIS, which comply with the European standard EN 16931. These formats enable electronic and automated processing of the invoice.

XRechnung

XRechnung is a standard for converting invoice information into an XML data file. It allows invoices to be received and processed by different software systems.

ZUGFeRD

ZUGFeRD is a hybrid format German e-invoicing standard that includes electronic XML and PDF versions of the invoice.

Peppol BIS

Peppol BIS complies with EN 16931 and is one of the accepted formats in Germany.

As a certified Peppol Access Point provider, we are fully equipped to meet all your business needs in international e-invoicing, purchase orders, and other e-document processes. For secure, efficient, and standards-compliant e-document exchange, feel free to contact us.

Mandatory E-Invoicing Timeline for B2B

The e-invoicing mandate in B2B transactions will be implemented in three phases between January 1, 2025 and January 1, 2028, and will be mandatory for all companies at the end of the process.

1.Indroduction of Mandatory E-Invoicing in Germany: From January 2025

From January 2025, all taxpayers in Germany will be obliged to receive e-Invoices. This means that all businesses must have systems ready to receive e-Invoices. In 2025, e-Invoicing will no longer be mandatory for invoices received in paper or unstructured formats. Also, recipient approval will not be required for invoicing processes. In summary, this can be seen as the first step for businesses to adapt their processes to receive digital invoices.

2. Temporary e-Invoicing Regulations for 2026 and 2027  

Until December 31, 2026, invoices can be issued in paper or unstructured electronic format for transactions in 2026, provided the recipient of the invoice consents. This allows businesses to gradually adapt between 2025 and 2026.

During 2027, a different transition period will apply according to company turnover. Only if the issuer had a total turnover of less than €800,000 in the previous year, and the recipient agrees, will invoices be issued in paper or unstructured digital format. At this point, companies with a turnover above €800,000 will have to issue e-invoices from January 2027.

3. Exception for Invoices Issued in EDI Format

According to the new law, until December 31, 2027, invoices in EDI (Electronic Data Interchange) format will be valid with the approval of the invoice recipient and structured e-invoicing will not be mandatory for companies using this format. This exception is intended to provide a comfortable transition period for companies using EDI until 2028.

4. New requirements starting in January 2027 and January 2028

In the final phase, from January 2027, companies with a turnover exceeding €800,000 will have to issue structured e-invoices. For companies with a turnover of less than €800,000, this obligation will start in January 2028. Thus, it is aimed that all businesses in Germany will be able to use e-invoicing.

• In 2025, businesses will still be able to use paper invoices. Unstructured electronic invoices will require the recipient's authorization.
• In 2027, paper invoices will be allowed under special conditions. Invoices issued in EDI format will be valid with the consent of the recipient.
• In 2028, only XRechnung, ZUGFeRD 0/2.1 or Peppol BIS formats compliant with EN 16931 will be valid.

Who needs to make an B2B e-invoicing?

The B2B e-invoicing obligation must be complied with by resident businesses in Germany and permanent establishments of foreign companies.

How Should You Adapt to Mandatory B2B e-Invoicing in Germany?

Early adaptation is crucial to successfully navigate the upcoming e-invoicing regulations. Businesses should review their systems and start using solutions compatible with the accepted e-invoice formats in order to avoid interruption of business processes, compliance problems and operational efficiency.

Germany SAP e-Invoice Solutions

As of January 1, 2025, businesses must be able to accept e-invoices in XRechnung, ZugFeRD 2.0/2.1 and Peppol BIS formats.

We recognize the sensitivity of companies operating in Germany to be ready for this change. We offer customized solutions to help you complete this transition quickly, reliably and cost-effectively.

EN 16931 Compliance: We enable you to seamlessly accept your e-invoices in XRechnung, ZugFeRD and Peppol BIS formats.

Expert Technical Support: Our local team in Germany guarantees a smooth transition by providing customized solutions for your needs.

4 Different Solutions for Germany e-Invoicing

• Public Cloud Solution - Fast Implementation
• Private Cloud Solution - Customizable Infrastructure
• SAP Process Orchestration Solution
• SAP Integration Suite Solution

Let's get your business ready for e-invoicing regulations before January 1, 2025! We would be happy to meet with you to accelerate your business's compliance process and to determine the most suitable solution.

You can contact us for information about our SAP e-Invoicing solution for Germany.