German requirements for electronic invoicing

German Requirement for Electronic Invoicing from 1 January 2025

It is expected that many German companies will need to change their workflows following the adoption of new German regulations on electronic invoicing.

Scope of the Regulations

The requirement for e-invoicing will exclusively apply to transactions between German companies (business-to-business). Invoices with a value below €250 and travel tickets are exempt from the requirement to issue and receive electronic invoices. Additionally, German companies are not required to issue invoices when dealing with third countries.

Although the current and upcoming legislation does not mention any mandatory electronic reporting for electronic invoices, we anticipate such requirements will follow in the coming years.

Germany Introduces a New Concept – Buyer Must Consent to NOT Receiving Electronic Invoices

Germany has submitted a request for an exemption regarding the requirement to use electronic invoicing and buyer consent. Contrary to the European Commission’s idea that the buyer must consent to receive electronic invoices, Germany is expected to introduce regulations where the buyer must consent if the seller does not send invoices electronically.

Timeline for the Implementation of the Regulations

Mandatory e-invoicing in Germany will be implemented in several phases:

• From January 2025: Companies must be able to receive electronic invoices.
• From January 2026: Companies can continue to issue paper or non-structured electronic invoices if the receiving company accepts them.
• From January 2027: Companies can continue to issue paper or non-structured electronic invoices if the receiving company accepts them, provided the seller’s turnover in the previous calendar year did not exceed €800,000. This means that if the company had a turnover of more than €800,000, it would be required to issue structured e-invoices from January 2027.
• From 1 January 2028**: Invoices related to transactions carried out in 2026 and 2027 can be issued in EDI formats if the receiving company accepts them. This applies regardless of the seller’s turnover, meaning that companies may continue to use the EDI format in 2028.

By the end of 2028, the intention is to abolish the EDI format for electronic invoices in Germany.

The abolition of historical EDI formats appears to be creating a stir in Germany in certain business sectors that were pioneers in EDI electronic invoicing. Although Germany is not the first country to introduce the EDI format, it may be the first to explicitly declare that this format will no longer be permitted.

Definition and Format of Electronic Invoices

Electronic invoices must comply with the European standard for e-invoicing and the list of corresponding syntaxes pursuant to Directive 2014/55/EU of 16 April 2014. This means that UBL and CII, which are structured formats complying with the EU standard, can be used when the German regulations take effect. However, EDI does not comply with the EU standard EN 16931, meaning that EDI format invoices will not be considered electronic invoices as mentioned above.

Our thoughts

At IntraVAT, we anticipate that many German companies will be busy preparing for the aforementioned regulations, but as we understand it, the rules only apply to companies that are actually established with a fixed place of business in Germany. This means that Danish companies that only have a German VAT number without having a fixed place of business in Germany will not be affected by the regulations.