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.
Table of Contents
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.
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 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 is a hybrid format German e-invoicing standard that includes electronic XML and PDF versions of the invoice.
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.
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.
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.
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.
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.
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.
The B2B e-invoicing obligation must be complied with by resident businesses in Germany and permanent establishments of foreign companies.
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.
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.
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.
GM & SAP PI/PO Consultant
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