- Mandatory electronic invoicing for domestic transactions starts on 1 January 2025, with transitional provisions.
- A first BMF letter was published on 15 October 2024, and a draft of the second letter is now available.
- Final publication of the second BMF letter is scheduled for the fourth quarter of 2025.
A first BMF letter on the topic was published on 15 October 2024 (reference: https://www.bundesfinanzministerium.de/Content/DE/Downloads/BMF_Schreiben/Steuerarten/Umsatzsteuer/2024-10-15-einfuehrung-e-rechnung.html)
Click HERE for the second letter
Summary:
- Mandatory Introduction of Electronic Invoicing: Effective January 1, 2025, all transactions between domestic entrepreneurs will require the use of electronic invoices (e-invoices). The document outlines transitional provisions to facilitate this change, ensuring businesses can adapt to the new requirements without disruption.
- Amendments to VAT Application Decree: The document details various amendments to the VAT Application Decree (UStAE), specifying changes to definitions and requirements for invoices. Key points include:
- Classification of Invoices: As of January 1, 2025, all paper invoices and electronic formats that do not comply with specific structured electronic requirements will be classified as “other invoices.”
- E-Invoice Requirements: E-invoices must be issued in structured electronic formats that comply with the European standards (EN 16931). The document emphasizes that e-invoices must enable electronic processing and contain all necessary VAT information.
- Exceptions and Transitional Provisions: Specific exceptions are noted for small invoices (under €250), invoices from small businesses, and transportation tickets. These can still be issued as standard invoices with the recipient’s consent. The document clarifies that consent for electronic formats can be implicit and does not require formal documentation.
- Technical Specifications: The document provides comprehensive guidelines on acceptable e-invoice formats, including structured and hybrid formats, and outlines the technical requirements for ensuring the authenticity, integrity, and readability of invoices. It emphasizes that structured data must be extractable for compliance with VAT regulations.
- Record Keeping and Compliance: Businesses must maintain electronic invoices in their original form for at least eight years, ensuring that the structured part remains intact. The document outlines the responsibilities of both invoice issuers and recipients in ensuring compliance with e-invoicing regulations.
- Implementation Timeline: The final publication of the revised VAT Application Decree is expected in the fourth quarter of 2025, following a draft sent to associations for feedback in June 2025. The document indicates that the principles outlined apply to all transactions executed after December 31, 2024, while previous transactions will follow the existing regulations as of that date.
- Publication and Access: The document concludes with information on its publication in the Federal Tax Gazette and its availability for download on the Federal Ministry of Finance’s website, allowing businesses and stakeholders to access the updated regulations and guidelines.
Source BMF
Other Newsletters
- Exemptions for Small Businesses: The draft guidelines propose that small businesses (Kleinunternehmer) will not be required to issue e-invoices and can continue using paper invoices, although they must still be able to receive electronic invoices if suppliers choose to send them.
- Clarifications on Invoicing Rules: The updated draft confirms that invoices under €250 and passenger transport tickets can be issued in paper form, but suppliers are allowed to issue compliant e-invoices for these transactions without needing buyer consent. Additionally, invoices containing both in-scope and out-of-scope transactions must adhere to e-invoicing requirements.
- Compliance and Retention Requirements: Structured electronic invoices must meet the EN 16931 standard to be considered compliant. Invoices with missing mandatory fields will affect VAT deductions, and e-invoices must be stored for eight years in their original format to ensure authenticity and integrity. If enacted, these amendments will retroactively apply to invoices issued from January 1, 2025.
Source Sovos
Click on the logo to visit the website
- Mandatory E-Invoicing Formats: For Business-to-Government (B2G) transactions, XRechnung is typically required, while for Business-to-Business (B2B) transactions, companies must adopt formats compliant with the EN 16931 European standard, primarily XRechnung and ZUGFeRD.
- Compliance with EN 16931: Starting January 1, 2025, businesses must ensure they can receive structured e-invoices, with large companies required to issue compliant formats by January 1, 2027, and all businesses by January 1, 2028. Other formats like EDI are permissible if they meet EN 16931 standards and recipient consent is obtained.
- Interoperability and Adoption: The PEPPOL network is increasingly being adopted for secure, standardized B2B invoice exchanges. Businesses should leverage this network for cross-border compatibility and ensure that their systems are equipped to handle various document types within the accepted e-invoicing formats.
Source Baker Tilly
- Germany’s Federal Ministry of Finance (BMF) published a second draft letter on June 25, 2025, revising the VAT Implementation Decree (UStAE) and detailing e-invoicing compliance requirements effective from January 1, 2025, while seeking industry feedback.
- Key compliance aspects include that formatting and content errors can invalidate e-invoices, necessitating corrections to be issued in the same format, and validation tools are recommended for adherence to European Norm (EN) 16931.
- The draft outlines exemptions for small invoices and B2C transactions, specifies archiving requirements for e-invoices, and updates terminology related to e-invoicing, with the final version expected in the fourth quarter of 2025.
Source Pagero
Germany Advances E-Invoicing Reform with New Draft Guidance
- Phased Implementation and Requirements: Germany’s B2B e-invoicing mandate commenced on January 1, 2025, requiring all VAT-registered businesses to accept structured e-invoices, with suppliers mandated to issue them by 2027, adhering to strict EU-compliant technical and legal conditions.
- Key Clarifications in Draft Letter: The Federal Ministry of Finance published a draft letter on June 25, 2025, amending the VAT Implementation Decree (UStAE), detailing that e-invoices are invalid if incorrect, require matching formats for corrections, and recommend validation tools for compliance with EN 16931.
- Exemptions and Compliance Rules: The draft specifies exemptions for small amounts, tickets, and small businesses, outlines consent requirements for B2C e-invoices, mandates 8-year archiving of XML in original form, and states that only fully compliant e-invoices are eligible for input VAT recovery. Feedback on the draft is being sought, with finalization expected by the end of 2025.
Source SNI
Draft of New BMF Letter on E-Invoicing: Key Changes and Validation Emphasis
- Since January 1, 2025, electronic invoices are mandatory for transactions between domestic companies.
- A new draft BMF letter aims to amend and supplement the previous guidelines on electronic invoicing.
- The draft emphasizes the importance of validating electronic invoices.
- The new guidelines will be incorporated into the VAT application decree.
- The draft addresses formal and content errors in electronic invoices.
- Files with format errors that do not meet structured electronic format requirements are considered other electronic invoices.
- Recipients can claim input tax deduction for non-compliant invoices during transition periods until the end of 2026 or 2027.
- Content errors, such as missing mandatory fields, result in the invoice being non-compliant, excluding input tax deduction.
- A reference to an attachment with unstructured mandatory information is insufficient.
- Incoming electronic invoices should be validated against the EN 16931 standard.
- Many invoicing systems can process electronic invoices, but comprehensive validation is often lacking.
- The RSMinvoice Testkit can help verify validation processes.
- There are eased storage requirements for electronic invoices under VAT law.
Source: ebnerstolz.de
- See also
- Join the Linkedin Group on Global E-Invoicing/E-Reporting/SAF-T Developments, click HERE
