Starting January 1, 2025, receiving e-invoices will become mandatory for many companies in Germany. Here you’ll find out what requirements apply, whom the regulations affect, and where exceptions still exist.
What is an e-invoice?
To begin with, a definition of the term shouldn’t be missing. An e-invoice is an invoice that is created and transmitted in a structured electronic format. It differentiates from PDF or paper invoices by its machine-readability. In Germany, the most common e-invoice formats are ZUGFeRD (Central User Guide of the Forum for Electronic Invoices Germany) and XRechnung. These formats allow invoice data to be processed automatically, minimizing errors and increasing efficiency.
This makes it clear why the introduction of e-invoices is being pursued. It is part of the EU’s efforts to digitalize payment transactions and reduce administrative burdens.
ZUGFeRD and XRechnung – An Overview of the Standards
ZUGFeRD combines structured data with a visual PDF, making processing easier for companies. Flexible profiles catering to different needs (such as “Basic” or “Comfort”) and a wide application across industries contribute to its popularity in Germany.
XRechnung was specifically developed for data exchange with public authorities and is a purely machine-readable format based on the European standard EN 16931. This interoperability and adaptation to EU standards ensures a future-proof format, especially considering upcoming regulations.
Who will be obligated starting in 2025?
Domestic companies that sell or provide taxable and tax-liable sales to domestic companies must be able to receive and subsequently process e-invoices starting January 2025. Important: The invoice recipient cannot request an alternative invoice type, even if they refuse to accept an e-invoice or cannot receive one technically. End consumers must still consent to electronic invoicing.
The general obligation to issue an e-invoice also applies starting January 1, 2025, and only affects taxable transactions between businesses (B2B). It does not matter whether the business is operated on a primary or secondary basis. A crucial factor is that both the supplying entrepreneur and the recipient of the service must be based in Germany. This means that the location, management, or an establishment involved in the respective sale must be within the country. Even a residence or usual place of stay in Germany is sufficient to trigger this obligation. Mere tax registration without residency in Germany does not lead to the obligation to issue e-invoices.
Small businesses exempt from sales tax must start issuing electronic invoices for B2B transactions by 2028 at the latest. A significant change that those responsible should prepare for early on.
Not affected are:
- – Tax-exempt deliveries and services
- – Small invoices under 250 euros and
- – Train ticket sales.
Transition period: Obligations from 2026 and later
Phase 1 (January 1, 2025, to December 31, 2026)
Companies often benefit from a transition period regarding obligations – hence the general obligation for issuance, for example. So, they can continue to use paper invoices and electronic invoices in old formats like PDF for domestic B2B transactions until the end of 2026. The prerequisite for electronically sent invoices – as before: The recipient must agree to this approach.
Considering the advantages of relief from work, time, and cost savings, transitioning to e-invoices should still be promoted. In any case, organizations must ensure that they can receive, process, and archive e-invoices themselves.
Phase 2 (January 1, 2027, to December 31, 2027)
The year 2027 also holds an exception for sales made in 2026 and 2027: Companies with a previous year's turnover of up to 800,000 euros may continue to use paper invoices and old electronic formats. Companies that exceed this turnover limit have at least the option to send invoices via the EDI procedure (electronic data interchange). For companies with a previous year’s turnover exceeding 800,000 euros in the B2B sector, the e-invoice obligation applies – without exceptions.
Phase 3 (from January 1, 2028)
From January 1, 2028, the new requirements for e-invoices will apply nationwide for all companies in the domestic B2B sector. The planned reporting system and the EU ViDA measures are also to be implemented by then.
Easy Transition
To be able to issue, receive, and archive e-invoices in compliance with the law, companies must upgrade their IT systems accordingly – ideally quickly and efficiently. To fulfill their obligations, companies can rely on proven solutions. ALVARA | Digital Solutions offers software for automatic invoicing for valuables service companies. E-invoices in formats such as XRechnung and ZUGFeRD can be created and sent automatically through this.
With the interface to another application – the Cash Center Software – companies benefit from further simplifications for the invoicing process. All master data and services provided, digitally recorded in Pecunia, can be automatically transmitted to Fakturio for invoicing.
Conclusion
The switch to e-invoices starting in 2025 primarily affects all companies engaged in B2B transactions in Germany. Even smaller companies should begin early with the necessary changes to ensure a smooth transition. This not only prepares them for the implementation of legal requirements but also improves efficiency and error reduction in internal processes.
Do you want to fulfill your obligations? We’ll show you how,
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