E-invoicing mandatory 2025
E-invoicing mandatory in Germany from 2025: Is your company ready?
From 2025, electronic invoicing, or e-invoicing for short, will be mandatory in the B2B sector in Germany. This is signaled by the current draft of the Growth Opportunities Act, which is currently under legislative review. One crucial detail here: despite their digital nature, PDF invoices are not considered e-invoices under this new law!
What exactly does this mean for your business and how can you ensure that you are not only compliant, but also reap the benefits of this innovation?
Electronic invoicing mandadory – Background and context
The current efforts of the German government are related to the European initiative "ViDA" (VAT in the Digital Age). The EU Commission is aiming to modernize the VAT system. The goal? A simpler, more secure system that prevents tax fraud. To achieve this, digital real-time reporting systems are to be introduced in the member states. And since this system is firmly based on e-invoices, the German bill can be seen as an anticipation of ViDA.
It is interesting to note that Germany is not the pioneer here. Countries such as Italy, Poland and France have already taken far-reaching steps in the direction of e-billing.
Switch to electronic invoicing – the plan for Germany
In Germany, a 2-stage model is envisaged.
- Stage 1: Introduction of mandatory use of e-invoicing from 2025.
Specifically, "e-invoices are to be introduced for domestic intercompany sales. In implementing this authorization, domestically established entrepreneurs will be required to issue an e-invoice for their taxable and taxable transactions when these transactions are provided to other domestically established entrepreneurs for their businesses." - Stage 2: Obligation for transaction-based reporting of B2B sales by entrepreneurs to a nationwide electronic system of administration (reporting system) from 2028 onwards.
What is an e-invoice? And what is it not?
An e-invoice is an invoice that is issued, sent and received in a structured, electronic format. It must be possible to process the invoice automatically and electronically.
The technical requirements for the e-bill should comply with the European e-bill standard EN 16931. These requirements are met, for example, by the XInvoice or the hybrid ZUGFeRD format from version 2.0 (PDF document with integrated XML). However, only the XML is relevant for tax purposes; the PDF is only used for viewing.
Accordingly, a conventional PDF invoice will no longer be an e-bill. It falls under the term "other invoices". This also includes paper invoices, but also invoices in other electronic formats that do not comply with the above EU standard - such as the EDI format EDIFACT.
E-Invoice mandatory – what are the transition periods?
In principle, the obligation to receive e-invoices will apply from 01.01.2025. However, due to the expected implementation effort for companies, transitional periods for the sending of e-invoices are envisaged:
- Deadline 1:
Until 31.12.2026, "other invoices", i.e. PDF, paper, EDI may also be transmitted. The prerequisite for this is the consent of the invoice recipient. Small companies get an additional grace period until 31.12.2026. - Deadline 2:
Until 31.12.2027 EDI invoices such as EDIFACT and others may be transmitted. Prerequisite here again the consent of the invoice recipient. Paper invoices and PDF invoices are no longer possible.
However, the BMF has informed in a recent letter that "a solution is being worked on to ensure the continued use of EDI procedures as far as possible under the future legal framework". - Deadline 3:
As of 01.01.2028, the new e-bill requirements must be complied with. This will then create the conditions for the planned tax reporting system.
Small-value invoices (up to EUR 250) are generally exempt from the obligation and can continue to be transmitted as PDF or paper invoices.
Changeover to e-invoicing – Your reliable partner: tangro
Even though the changes in Germany will only be implemented successively over the next few years, you should definitely address the issue and adapt your processes accordingly.
With years of experience in e-invoice processing, tangro supports you competently and reliably. With our SAP-integrated automation solutions, all relevant formats can be processed, including XRechnung, ZUGFeRD, but also other EU formats such as the Italian Fattura PA. Read more about e-invoicing with tangro here.
The switch to e-invoices will improve your invoice processing. There is no need to read PDF or scanned paper invoices with OCR software and interpret the data, eliminating errors. The process now focuses more on matching with purchase order and delivery data, checking routines, and release and clarification workflows. In the optimal case, the dark posting takes place. In case of clarification, a visualization of the e-invoice is helpful for the accounts payable department.
Well-known companies such as Weig, Webasto and Thüga SmartService have already successfully implemented e-billing with tangro on a national as well as international level. Sven Class from Thüga SmartService says: "“Using tangro means that e-invoicing is automatically implemented, too. Our customers get a solution, that has been tested over the years and has been proven to work reliably."
In the B2G business, we have been supporting our numerous public customers for years in the processing of XInvoices and ZUGFeRD invoices.
Prepare your company optimally for future requirements. Contact us and let us master the challenges together!