Germany: Introduction of B2B Electronic Invoicing
B2B Electronic Invoicing in Germany
Germany is beginning to consider its strategy for implementing electronic invoicing between companies in the country. The government coalition requested the repeal of Articles 218 and 232 of the European Directive on Electronic Invoicing from the European Union in December 2022. These articles specify that companies must first obtain permission from their suppliers to adopt electronic invoicing.
On April 17, 2023, the German Federal Ministry of Finance announced the launch of a plan to introduce electronic invoicing between companies in the country. The proposal is open for consultation until May 8, 2023.
They anticipate that the regulations could come into effect in January 2025 and are considering a phased implementation. Several implementation models are being evaluated:
- 5-corner model via Peppol: In this model, companies will need to have their own Peppol Access Point for the exchange of electronic documents. The Peppol Access Points will send the documents to a national platform. Subsequently, document exchange between companies will be carried out through the Access Points of each company.
- A model similar to the one to be implemented in France, using certified private platforms for the exchange of electronic invoices. In this model, there is a centralized government platform that receives all the documents, but the validation of these documents is done prior to their submission to the platform managed by service providers certified by the government. Subsequently, document exchange between companies takes place through these providers rather than through the centralized government platform.
The draft from the Federal Ministry of Finance also includes the following points:
- Limiting electronic invoicing to domestic B2B transactions.
- Defining electronic invoicing based on CEN 16931.
- Eliminating paper invoices.
In this way, Germany demonstrates its clear intention to implement a B2B electronic invoicing model in the country, similar to that of France or Italy. These are clearance or validation models, where a taxpayer sends their invoice to the tax authority, which validates it in real time before sending it to the recipient.
The German government's proposal would align with the European proposal VAT in the Digital Age (ViDA), using the European standard for electronic invoicing EN 16931. However, there is still no confirmation from the government regarding when the mandatory B2B electronic invoicing would be introduced.
Germany's electronic invoicing system is decentralized in each of its federal states, so the introduction of a unified B2B invoicing system would pose a great challenge.
B2G e-Invoice in Germany
As of 18 April 2020, federal states must support electronic invoicing according to European Directive 2014/55/EU. The development of electronic invoicing depends on each federal state (Bundesland) publishing its own transposition of the European Directive through a decree law regulating communication systems, formats, and entry points. The only requirement is that connection via Peppol must be offered in all cases.
The federal states that will soon require their suppliers to issue e-invoices are Mecklenburg-Vorpommern in 2023 and Hesse in 2024. In Rhineland-Palatinate, the target date is also January 1, 2024.
Check out the latest information on the implementation status of B2G invoicing in the states of Germany.