Published: August 2024
Germany takes a step toward modernizing its invoicing processes. With the publication of the Growth Opportunities Act on March 23, 2024, the Federal Ministry of Finance has introduced e-invoicing as the standard method for B2B transactions starting January 1, 2025. From this date, all businesses in scope must be able to receive structured electronic invoices, while the obligation to issue e-invoices will be introduced gradually in 2027 and 2028. This move marks a pivotal moment in Germany’s journey toward digitalization and tax simplification.
Technical Specifications
Starting 01 January, 2025, the receiving of e-invoices in accordance with EN 16931 will be mandatory for all German B2B transactions. The Federal Ministry of Finance (BMF) published its final guidance letter on 15 October 2024, confirming that ZUGFeRD from version 2.0.1 and XRechnung generally represent structured electronic invoice formats that meet the requirements, provided they comply with EN 16931.
This means that starting 01 January, 2025, there will be an obligation to receive the following formats in accordance with EN 16931 or other formats that are compatible with EN 16931:
- ZUGFeRD: Hybrid format – human-readable PDF/A-3 with embedded XML file in the syntax “Cross-Industry Invoice” (CII)
- XRechnung: XML file based on the permitted EN 16931 syntaxes, including Cross-Industry Invoice (CII) or Universal Business Language (UBL)
- Peppol BIS Billing 3.0: UBL-based structured electronic invoice format compatible with EN 16931
Paper invoices can continue to be used for B2B transactions throughout 2025 and 2026. Electronic invoices that do not comply with the new format will also remain permissible during this period, although (as before) the consent of the invoice recipient is required (§ 27 para. 38 no. 1 UStG-E). From 2025, however, a recipient’s consent is no longer required for receiving an EN 16931-compliant e-invoice.
Implementation Timeline
Growth Opportunities Act (2024) provides further guidelines and technical information on the B2B e-invoicing. The timeline for the implementation can be summarised as follows:
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- Jan 1, 2025: E-invoicing becomes the standard, all taxpayers must be capable of receiving electronic invoices. Paper invoices and other non-EN 16931 compliant invoices may still be issued during the transition period, subject to the applicable consent rules.
- Jan 1, 2027: Mandatory e-invoicing for companies with a turnover above €800,000.
- Jan 1, 2028: Mandatory for all businesses.
- Jan 1, 2025: E-invoicing becomes the standard, all taxpayers must be capable of receiving electronic invoices. Paper invoices and other non-EN 16931 compliant invoices may still be issued during the transition period, subject to the applicable consent rules.
E-invoices do not require electronic signatures but must be archived for eight years. The retention period for invoices was reduced from 10 years to 8 years as of January 1, 2025.
How Can SNI Help You
SNI’s solution provides complete support for both outbound and inbound invoices. In line with Germany’s current e-invoicing requirements, we assist businesses by converting incoming invoices in XML format into a human-readable format, ensuring compliance with the regulations. After the incoming data is read, data flow is provided to the relevant tables and information is flowed to the related module from these tables. SNI supports the processing of EN 16931-compliant invoice formats used in Germany, including XRechnung, ZUGFeRD, Peppol BIS Billing 3.0, and other compatible XML structures.
All inbound invoices are displayed on SNI’s Inbound Cockpit, a dedicated interface designed to enhance the user experience and allow efficient management. Each invoice is available in both XML and (human-readable) HTML/PDF formats, ensuring detailed insight and compliance with regulatory requirements.
Looking ahead to 2027, when the e-invoicing obligations expand, we will extend our solution to cover not only inbound invoices but also outbound invoices, providing a comprehensive approach to meet all future regulatory needs. The outbound process will support invoice generation, mapping, validation, format conversion, transmission, status monitoring, and archiving for Germany’s mandatory B2B e-invoicing framework.
SNI solution integrates with clients’ systems without the need for updates to existing system versions and is independent of SAP versions. SNI’s SAP solution is compatible with SAP ECC 4.7 and above, as well as SAP Business Technology Platform (BTP), SAP R3 and SAP S/4HANA. In addition, SNI provides ERP-independent solutions designed to integrate with any ERP system clients may use.
Germany e-Invoicing Key Questions
What is the history of B2G e-Invoicing in Germany?
While B2B obligations are new, Germany has a history with B2G e-invoicing. The e-Bill law (2017) mandated federal contracting authorities to receive e-invoices. Since 27 November 2020, all suppliers issuing invoices to federal public authorities have been obligated to submit and process e-invoices in accordance with the requirements of the Federal E-Invoicing Ordinance, generally using the current XRechnung standard. Other EN 16931-compliant formats may also be accepted if they meet the applicable federal portal requirements.
What does EN-16931 Format mean?
EN-16931 forms the foundation of the EU’s directive aimed at standardizing electronic invoicing. It provides a unified semantic data model ensuring that invoice content is interoperable across different systems. Germany’s accepted formats (XRechnung, ZUGFeRD, and Peppol BIS 3.0) all align with this standard.
Is there a specific distribution channel for the transmission of e-Invoices?
Unlike countries like Italy (which uses the SDI as a central platform), Germany does not mandate a single central exchange system. German companies can select their preferred methods for invoice transmission, provided they meet the standards. While e-mail exchange is permitted, more secure solutions may be prioritized in the future.
Is there a digital reporting requirement in addition to e-Invoicing?
Currently, no. The Growth Opportunities Act does not involve a digital reporting mandate. However, it is expected that Germany will aim to harmonize with the reporting requirements mandated by the EU’s ViDA (VAT in the Digital Age) initiative in the near future.