Second BMF Letter on E-Invoicing: New Error Categories and VAT Deduction Implications

Link to the second letter issued by the BMF

The German Federal Ministry of Finance (BMF) has released updated guidance, effective October 15, 2025, providing clarifications on the mandatory electronic invoicing for domestic B2B transactions, which began on January 1, 2025.
The guidance details distinctions between format and business rule errors, clarifies readability requirements for structured and hybrid e-invoices, and emphasizes that e-invoice validation supports but does not replace the recipient’s responsibility for accuracy.
It also reconfirms permitted distribution methods (e.g., EDI, email), mandates archiving e-invoices in their original structured format for integrity, and specifies that credit notes must also be issued as clearly marked e-invoices.

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Since 01.01.2025, electronic invoices are mandatory for transactions between domestic companies in Germany.
The second BMF letter, published on 15.10.2025, amends and supplements the previous guidance and introduces significant changes to VAT application rules.
Three categories of possible errors in e-invoices are now defined: format errors, business rule (content) errors, and another unspecified category.
Format errors allow for input tax deduction only during the transition period, ending in 2026/2027; after that, only formally correct e-invoices are valid for deduction.
Business rule errors affecting mandatory VAT information result in invoices being considered non-compliant, excluding the right to input tax deduction.

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E-invoicing