Germany has taken the step into the digital era of electronic invoicing. The aim is to boost the economy and reduce bureaucratic hurdles. It is important to act now and prepare for the mandatory e-invoicing.
NEW - AUGUST 2024
Germany has passed the Growth Opportunities Act, which makes electronic invoicing mandatory in the B2B sector. The aim is to boost the economy and reduce bureaucratic hurdles.
What will change?
Technical requirements
Invoices must comply with the EN 16931 standard. Companies can continue to use EDI standards if they agree.
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Support from ecosio
ecosio offers solutions for compliance and process automation. Contact the company at edi@ecosio.com if you have any questions on the subject.Â
Support from ecosio
ecosio offers solutions for compliance and process automation. Contact the company at edi@ecosio.com if you have any questions on the subject.
You can also read our article on the topic: B2B E-invoicing in Germany: An Overview
In Germany, the VAT gap stands at 2.8%, resulting in an annual revenue loss of 7.46 billion euros. Unsurprisingly, the long-term goal is to reduce this gap, and the recent e-invoicing initiative in Germany is already making a difference by increasing automation and delivering significant time and cost savings for businesses. Although digital reporting to reduce the VAT gap will be fully realised at a later stage, the B2B mandate will undoubtedly accelerate this process by improving the efficiency of invoice exchanges.
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E-invoices must comply with the EN 16931 standard. However, companies can continue to use EDI standards if the invoice issuer and recipient agree.
The required standard for electronic invoicing in the B2G sector in Germany is XRechnung, which aligns with the EN 16931 standard. While ZUGFeRD is also accepted, it must include an XRechnung profile, essentially making it a Cross Industry Invoice (CII) XML, similar to XRechnung. For B2B e-invoicing, invoices must conform to the EN 16931 standard, with ZUGFeRD (version 2.0.1 or later) also being permitted.
The introduction of e-invoices in Germany is taking shape as new technical requirements have been defined. According to the current guidelines, e-invoices must comply with the EN 16931 standard. However, companies also have the option of continuing to use EDI standards if the invoice issuer and recipient agree.
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There are currently no mandatory formats for B2B transactions, but the introduction of XRechnung and Peppol BIS is planned. The infrastructure for B2B transactions is not yet mandatory, but implementation plans are being discussed.
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In contrast, the use of XRechnung and Peppol BIS is mandatory for B2G transactions. Companies already have to adapt to the existing infrastructure, which includes different platforms depending on the federal state as well as Peppol.
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Although there is currently no centralised German e-invoicing platform, Germany may be planning to introduce such a solution at a later date.
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It is crucial that companies are able to comply with e-invoicing regulations. This includes the ability to create, transmit and receive invoices in structured formats and to exchange messages with partners without media discontinuity and in an automated manner. As the introduction of e-invoicing is mandatory in Germany, companies that do not comply with the regulations could face legal consequences such as fines or other sanctions from the tax authorities.
From 1 January 2025, companies in Germany must be able to receive and send e-invoices; issuing will be mandatory from 1 January 2028.
E-invoices must comply with the EN 16931 standard.
The EN 16931 format is allowed for B2B deliveries, while the XRechnung format is required for B2G deliveries.
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