Until December 31, 2024, German businesses can issue both paper and electronic invoices, with the latter including formats such as PDFs. However, starting in 2025, these formats will largely be phased out for B2B transactions, with strict guidelines on acceptable e-invoice formats.
Fundamental Changes in the Growth Opportunities Act
1. Definition and Requirements for e-Invoices
An e-invoice must be in a structured electronic format, facilitating automated processing. Acceptable formats include those compliant with the European standard EN 16931, such as XRechnung and ZUGFeRD version 2.0.1. The e-invoice must ensure authenticity, integrity, and machine-readability, negating the necessity for a human-readable counterpart, though optional.
2. Types of Invoices
From 2025, invoices will be classified as:
- e-Invoices: Structured electronic formats meeting specified standards.
- Other Invoices: Paper or non-structured electronic formats (e.g., simple PDFs).
3. Issuance Obligations
Businesses must issue e-invoices for B2B transactions within six months of service delivery. The recipient’s consent for e-invoices is no longer required, assuming they have the technical capability to receive them. Non-compliance could impact VAT deduction claims.
4. Specific Scenarios
Certain transactions are exempt from mandatory e-Invoicing, including:
- Tax-exempt services under § 4 UStG (Section 4 of the German Value Added Tax Act (Umsatzsteuergesetz).
- Low-value invoices (under €250).
- Transportation tickets.
Implementation and Transition
The BMF acknowledges the need for a transition period and will provide guidance and support during this transformation process. Businesses will have until the end of 2026 to fully transition to e-invoices, and small businesses (annual turnover under €800,000) have until the end of 2027. Paper and other electronic formats can still be used during this period, provided both parties agree.
Key Takeaways
- Mandatory e-Invoicing for B2B transactions starts January 1, 2025.
- Structured formats like XRechnung and ZUGFeRD are required.
- Recipient consent is not needed for e-Invoices.
- Exemptions include certain tax-exempt services and low-value invoices.
- The transition period extends until the end of 2026, with smaller businesses having until the end of 2027.
The complete draft of the new regulation is available on the German Ministry of Finance website for detailed information and guidance.
