Germany: Current Status of B2B E-Invoicing

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.

On March 22, 2024, the Bundesrat passed the Wachstumschancengesetz, which makes B2B e-invoicing mandatory, starting in January 2027 for companies with a turnover of more than €800,000 and in January 2028 for companies with a turnover of less than €800,000. However, all companies must be able to receive electronic invoices from 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 law 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.
 

What's new in e-Invoicing in Germany

The BMF updates its letter on B2B e-invoicing with the following points:

• Difference between e-invoice and other invoices: invoices in XRechnung, ZUGFeRD and those compatible with the European standard EN 16931 are considered e-invoices. All other invoices in other formats are considered “other invoices”.
• Receipt of e-invoices: As of January 2025, an invoice receiver cannot refuse to accept e-invoices from its issuers.
• Electronic archiving: The structured invoice must be stored in its original format and meet the requirements of unalterability. EDICOMLta's electronic storage solution is also compliant with the German storage standard known as GobD, guaranteeing traceability, verifiability and integrity of the stored documents.
• Corrective invoices: The correction of an invoice must be done in the same way as the original structured invoice. It is not possible to modify or correct invoice data by non-electronic means.
• National portal: The government is considering in the future the possibility of sending electronic fiscal reports of certain invoice data to a national portal.

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

1. All companies must be able to receive e-invoices.
2. Voluntary issuance of e-invoices.
3. It is important to emphasize that there will be no national centralized platform.

01/01/2027

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

01/01/2028

1. 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, 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, 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.
2. Other formats (XML, EDIFACT, etc.) provided they are compatible with the EN16931 format.

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.
• December 2023:  The "Growth Opportunities Act" was expected to be approved by the Bundestag on December 15. However, on December 4, the Bundesrat rejected the version of the law approved by the Bundestag. The Bundesrat advocates for a two-year extension for the mandatory implementation of electronic invoicing.
• February 2024: The "Growth Opportunities Act" has been referred to the mediation committee, whose goal is to resolve differences in the legislative process between both chambers. The Bundestag voted in favor of the compromise version on February 23.
• March 22, 2024: The Bundesrat passes the Wachstumschancengesetz, which makes B2B e-invoicing mandatory.

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.

Factur-X and ZUGFeRD Formats

Since 2015, the German e-Invoicing Forum (FeRD) and the French National Forum for e-Invoicing and e-Procurement (FNFE-MPE) have been collaborating on the development of a Franco-German e-invoice standard. The goal is to simplify the exchange of invoice information for both domestic and cross-border transactions, especially for small and medium-sized enterprises.

Factur-X is one of the three mandatory invoice formats for all French taxpayers as part of France’s e-invoicing and e-reporting reform, which will begin on a voluntary basis in early 2025. In Germany, ZUGFeRD is one of the accepted formats under the upcoming B2B e-invoicing mandate, also set to take effect in 2025.
In March 2022, the FNFE-MPE and FeRD published a harmonized version of Factur-X 1.0.06 / ZUGFeRD 2.2, compliant with the European standard EN16931. 

The latest versions, Factur-X 1.0.07 / ZUGFeRD 2.3, are technically identical formats with shared documentation available in French, German, and English. This update enhances the EXTENDED profile to handle a wide range of business cases that require e-invoices to include all mandatory fields in a structured format.

Factur-X/ZUGFeRD also supports reference profiles such as XRECHNUNG for Germany and EXTENDEDCTC-FR for France, which is a subset of the EXTENDED profile.