E-INVOICING IN GERMANY

Update April 4th, 2024

Mandate on B2B e-invoicing adopted in Germany

On 22 March 2024, the German Bundestag passed a new law (Wachstumschancengesetz), which will promote economic growth, simplify taxes and charges, and ensure competition among German companies. In this new mandate, key regulations are put in place for the introduction of mandatory e-invoicing in Germany.

Who does the law apply to?

The obligation to use e-invoices, cf. the new mandate, applies exclusively to German companies in the B2B context.

Germany already has an existing implementation for e-invoicing for B2G (Business to Government), and here e-invoicing has already been rolled out in many of the German federal states, where the formats X-rechnung and Peppol BIS 3.0 are used in conjunction with the electronic business network Peppol.

B2G is therefore not part of the new e-invoice legislation and is therefore only reserved for German-registered companies.

Timeline for the implementation of the German B2B e-invoice mandate

See the following figure for the step-by-step implementation plan of B2B e-invoices in Germany.

There are three primary dates that you must consider as a German company.

Date	Legislation	Allowed invoice formats
01.01.2025	All German companies must be ready to receive e-invoices. Voluntary issuance of e-invoice from supplier.	ZUGFeRD (EN16931 compliant) Xrechnung (EN16931 compliant) Xinvoice (EN16931 compliant) Paper invoice and PDF EDIFACT, X12 etc.
01.01.2027	German companies with a turnover of more than EUR 800,000 are obliged to send e-invoices in these invoice formats.	ZUGFeRD (EN16931 compliant) Xrechnung (EN16931 compliant) Xinvoice (EN16931 compliant) Paper invoice and PDF (only allowed with buyer’s permission) EDIFACT, X12 etc (only allowed with buyer’s permission)
01.01.2028	All German companies must issue B2B e-invoices. Postal invoices and PDF invoices will no longer be allowed.	ZUGFeRD (EN16931 compliant) Xrechnung (EN16931 compliant) Xinvoice (EN16931 compliant) EDIFACT, X12 can be used if they are EN16931 compliant

How are B2B e-invoices exchanged in Germany?

We still do not know which channels and networks that will be used to send and receive e-invoices between German companies.

In relation to B2G, the Peppol network is used if the receiver is registered to receive one or more invoice formats.

Peppol, however, is not mentioned in the new German e-invoice law, which means that the distribution of e-invoices most likely will be a mix of Peppol, e-mail, AS2, sFTP and other known exchange channels.

VAX 360 ensures your compliance in Germany

If you work in a German-registered company, the B2B e-invoice law will be mandatory for you on 1 January 2025.

With a VAX 360 document platform, you ensure compliance with the German legislation. All known e-invoice formats can be sent and received via VAX 360 as standard.

The VAX 360 platform is connected to the Peppol network and other VANS networks, which enables the submission and receipt of e-invoices to and from German companies. Also including receiving and processing the PDF hybrid format ZUGFeRD.

VAX 360 enables you to convert to and from your ERP formats (SAP, Oracle, Microsoft etc.) to the legally required German e-invoice formats, should this be necessary for you.

ViDA and B2B e-invoicing in Germany

Choosing EN16931 as the underlying standard for e-invoicing in Germany is closely related to the upcoming European VAT directive, ViDA, where companies are required to send real-time data to their local tax authorities. In ViDA, EN16931 is the underlying invoice standard for all e-invoicing for intra community trade in the EU. By implementing the same invoice standard, Germany ensures a good starting point for the upcoming ViDA VAT reporting directive, which is expected to be enforced in 2030.

Update November 24th, 2023

The Federal Ministry of Finance, BMF, has proposed mandatory e-invoicing for B2B companies will be required from January 2026. However, businesses have the option to voluntarily implement e-invoicing from 2025.

UPDATE NOVEMBER 24TH, 2023

The Federal Ministry of Finance, BMF, has proposed mandatory e-invoicing for B2B companies will be required from January 2026. However, businesses have the option to voluntarily implement e-invoicing from 2025.

ACHIEVING COMPLIANCE IN GERMANY: AN OVERVIEW WITH MYSUPPLY

Germany has been a latecomer to digitalization and currently has a highly fragmented and complex setup for the exchange of electronic business documents.

Since November 2020, it has been mandatory in Germany to settle deliveries and services to all public institutions through e-invoicing (§ 3 E-Invoicing Ordinance, E-RechV).

Institutions in the federal administration, for example, receive e-invoices on the central federal invoice receiving platform (ZRE).

Several institutions in the indirect federal administration receive e-invoices via the online invoice receiving platform (OZG-RE), which complies with the law on online invoice receipt.

At the state level, the situation is more varied, and each state has its own legislation on e-commerce that must be taken into account. Several states, for instance, use the central solution called XRechnung, which has been endorsed by the German IT Planning Council.

LEGISLATION

Since April 18, 2019, central public institutions in Germany have been required to be capable of receiving electronic invoices.

There is currently no specific legislation in Germany regarding B2B e-invoicing. However, the German Federal Parliament has urged the adoption of mandatory B2B e-invoicing to help combat VAT fraud. This follows the successes in Italy, Hungary, and the plans for Poland and France. There is already a public platform that small and medium-sized German companies can use called the Zentrales Rechnungseingangsportal OZG-RE platform.

WHAT CAN BE EXCHANGED?

Electronic Invoices and Credit Notes: The XRechnung standard has been developed to align/comply with EU specifications. Technically, XRechnung is a Core Invoice Usage (CIUS) of EN 16931. This specification is now in effect for national, regional, and municipal authorities. Additionally, the ZUGFeRD standard can be used. This is a French/German standard used for a kind of hybrid invoicing where PDF documents contain electronic XML documents as attachments.

HOW ARE ELECTRONIC BUSINESS DOCUMENTS EXCHANGED?

SRE (Zentrale Rechnungseingangsplatform)

The national German platform for receiving B2G (Business-to-Government) invoices is the ZRE (Zentrale Rechnungseingangsplatform) and can be accessed via https://xrechnung.bund.de/. Although this platform is federal, not all federal states use it. Some have their own solutions/portals. All portals offer different options for sending invoices. This includes online solutions for organizations without EDI capabilities.

Peppol Network

We are seeing an increasing number of German public organizations, including those at both the federal and municipal levels, supporting Peppol and invoice receipt through Peppol. Specifically, the following federal states in Germany, with more than 5,000 municipalities, are connected to Peppol and can theoretically be reached via this network.

Federal states already connected to Peppol:

• Hamburg
• Schleswig-Holstein
• Mecklenburg-Vorpommern
• Bremen
• Brandenburg
• Berlin
• Saxony-Anhalt
• Thuringia
• Saxony
• North Rhine-Westphalia
• Baden-Württemberg

Federal states in the process of implementing Peppol or have not yet started implementation:

• Lower Saxony
• Hesse
• Bavaria
• Rhineland-Palatinate
• Saarland

TAX REPORTING / TAX CLEARANCE

Germany does not yet have specific legislation in this area, but it is closely examining the EU’s VIDA proposal. There has been strong interest in promoting B2B e-invoicing legislation, with the initial proposal set for 2025. However, it has already been assessed that this is too short a timeline for such a radical implementation. If VIDA is implemented by the EU, German companies will have to report VAT information in real-time in 2028.

CTC or Tax clearance is on the agenda in the EU and, therefore, in Germany. One of the major topics on the financial agenda in the EU is ViDA (VAT In The Digital Age). European legislation is being developed for the use of e-invoicing and mandatory VAT clearance with national tax authorities to combat VAT fraud. In the EU, there is a vision of a future where invoices are electronic, and VAT is reconciled in real-time. The model for this has not yet been determined.

ARCHIVING REQUIREMENT

10 years of archiving for electronic invoices and credit notes.