Electronic Invoicing

Germany: Current Status of B2B E-Invoicing

Germany: B2B electronic invoice

Germany is actively preparing for its B2B e-invoicing initiative as part of the Wachstumschancengesetz, a law aimed at promoting business growth, simplifying taxes, and ensuring tax fairness.

Initially, Germany aimed to implement B2B e-invoicing from January 2025, but the Bundesrat has recently proposed a phased approach, allowing for voluntary adoption from January 2025 and making it mandatory in two stages by January 2027. However, all companies must be prepared to receive e-invoices by January 2025.

The German government's plan is in line with the European proposal VAT in the Digital Age (ViDA), and they intend to use the European e-invoicing standard EN 16931. The current proposal does not involve sharing data with the tax authority.

It's important to note that Germany's B2G e-invoicing system is decentralized across its federal states, posing a significant challenge in implementing a unified B2B billing system.
 

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Phases of B2B E-Invoicing Progress in Germany

  • 2021: The coalition parties were exploring the idea of introducing an electronic reporting system based on e-invoicing.
  • November 2022: The government coalition had requested the European Union to remove Articles 218 and 232 from the European Directive on e-invoicing, which mandated companies to obtain their suppliers' consent before adopting e-invoicing.
  • April 2023: The German Federal Ministry of Finance announced the plan to implement e-invoicing for business-to-business transactions in the country, with the commencement of a public consultation on e-invoicing on April 17, 2023.
  • June 2023: The European Commission recommended to the Council that Germany should proceed with its B2B e-invoicing mandate. According to the proposal, Germany would receive a temporary exemption starting from January 1, 2025, until December 31, 2027, or until the adoption of ViDA.
  • In July 2023, the BMF published the initial draft of the Wachstumschancengesetz project, which includes key points regarding e-invoicing:
    • Limiting e-invoicing to domestic B2B transactions.
    • Defining e-invoicing based on CEN 16931.
    • Elimination of paper invoices.
  • August 2023: The BMF released an updated version of the Wachstumschancengesetz law, which introduced the option of using EDI formats for a limited time.
  • October 2, 2023: The BMF announced a provisional timeline for implementing B2B e-invoicing.
  • October 20, 2023: The German Parliament, in its feedback on the Wachstumschancengesetz law, proposed a two-year extension to the obligation for companies to receive e-invoices.

Currently, it is expected that the parliament will review the law in the coming weeks, with a vote scheduled for December 15, 2023.

    Provisional Implementation Schedule of the B2B Project

    The BMF has proposed an implementation schedule affecting reception, issuance, and the use of different formats.

    01/01/2025

    • All companies must be able to receive e-invoices.
    • Voluntary issuance of e-invoices.

    01/01/2027

    • Mandatory issuance of e-invoices for companies with an annual turnover exceeding 800,000 EUR.

    01/01/2028

    • All companies must issue B2B e-invoices.

    Allowed Formats by Phase

    01/01/2025

    1. Paper
    2. E-invoice according to EN 16931, which defines the semantic model related to the data to be included in the invoice: National formats supported in Germany: XRechnung and ZugFeRD.
    3. Other formats (XML, EDIFACT, X12, etc.)

    01/01/2027

    1. Paper: allowed under special conditions
    2. E-invoice according to EN 16931, which defines the semantic model related to the data to be included in the invoice: National formats supported in Germany: XRechnung and ZugFeRD.
    3. Other formats (XML, EDIFACT, X12, etc.): allowed under special conditions

    01/01/2028

    1. E-invoice according to EN 16931, which defines the semantic model related to the data to be included in the invoice: National formats supported in Germany: XRechnung and ZugFeRD.

    B2G e-Invoice in Germany

    Since April 18, 2020, German federal states have been mandated to accept e-invoices in compliance with European Directive 2014/55/EU. The progress of e-invoicing adoption depends on each individual federal state (Bundesland) issuing its own legal decree, outlining the regulations for communication systems, formats, and entry points. The only universal requirement is that e-invoicing must be accessible through Peppol in all cases.

    Upcoming federal states that will soon require their suppliers to generate e-invoices include Rhineland-Palatinate starting on January 1, 2024, and Hesse in April 2024.

    Check out the latest information on the implementation status of B2G invoicing in the states of Germany.

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