In a move aimed at reigniting economic growth and reducing bureaucratic hurdles, Germany has finally passed the much anticipated Growth Opportunities Act. The act, which will make B2B e-invoicing mandatory in the country in the coming years, was officially passed by the Bundesrat (Germany’s upper house of parliament) on 22 March 2024, having previously been passed by the Bundestag (Germany’s lower house of parliament) on 23 February 2024.
This progressive move toward e-invoicing not only demonstrates Germany’s commitment to leveraging technology for economic rejuvenation, but also positions German businesses at the forefront of digital financial practices.
What does the Growth Opportunities Act aim to achieve?
The act aims to provide tax relief measures to facilitate growth in an economy that has struggled in recent times, with Gross Domestic Product (GDP) having fallen by 0.3% in 2023. In short, by passing this act, the German government hopes to make the country’s economic landscape more efficient, transparent and resilient moving forward.
What changes will the Growth Opportunities Act bring?
A pivotal component of the Growth Opportunities Act is the introduction of a new e-invoicing mandate for domestic business-to-business (B2B) transactions. This development represents a drive to streamline financial operations and reduce the administrative overhead associated with traditional paper invoicing processes. Although debates within the Bundesrat in November 2023 suggested a potential postponement, which would have extended the timeline for adopting electronic invoicing until 2027 for receivers, the initial schedule set forth by the German Ministry of Finance (BMF) will proceed as planned.
What is the timeline?
The timeline for the phased implementation of the e-invoicing mandate is as follows:
- 1 January 2025: All German businesses must be able to receive and process electronic invoices
- 1 January 2027: German businesses with an annual turnover exceeding €800k must issue their invoices electronically for domestic B2B transactions
- 1 January 2028: All German businesses must issue invoices electronically for domestic B2B transactions
What are the technical requirements?
To ensure a seamless transition, electronic invoices must adhere to the EN 16931 standard. However, businesses retain the capacity to negotiate the Electronic Data Interchange (EDI) standards used, provided mutual agreement is reached between invoice issuers and recipients.
Whilst Germany will eventually need to comply with the digital reporting requirement (DRR), as outlined in the European Commission’s VAT in the Digital Age (VIDA) proposal, the mandate is specific to invoice exchange between supplier and buyer and does not include a Continuous Transaction Controls (CTC) / centralised model.
How ecosio can help
For organisations preparing to navigate this change, understanding the specifics of the mandate and beginning the transition early can significantly mitigate the challenges associated with adopting new technological frameworks. Thankfully ecosio’s e-invoicing experts are able to support you as Germany embarks on this journey toward digitalisation.
ecosio.invoicing makes meeting country-specific regulations easy. Our state-of-the-art Integration Hub acts as a single gateway to connect your business to customers, tax administrations and other government platforms all over the world; enhancing automation, driving down costs and helping you to achieve compliance.
Find out more
For more information on ecosio’s unique EDI solution, please contact us at edi@ecosio.com or talk to our Sales team.
