In the future, issuing electronic invoices in business-to-business (B2B) transactions will be mandatory in Germany. This amendment is part of the German so-called Growth Opportunities Act, which cleared the final parliamentary hurdle on 22 March 2024.

The law applies to deliveries and services between companies if both are based in Germany. This applies if the registered office, management, or permanent establishment is located in Germany. If a foreign company has a permanent establishment in Germany, a portion of its turnover must be realized in Germany. If in doubt, you should seek professional tax advice.

An e-invoice is an invoice issued, transmitted and received in a special format that enables automatic processing. The format must comply with an EU standard. Exceptions can be made for certain formats, provided that the required information is available in machine-readable form. Permitted formats include, for example, XRechnung as a purely machine-readable format and ZUGFeRD as a hybrid format, which is a combination of machine-readable data and a PDF invoice that can be read by the human eye. The EDI procedure already used by some companies remains permissible, but might require adjustments in the future.

Note: From 1 January 2025, a plain PDF invoice is no longer considered an electronic invoice, but an “other invoice”.

All companies without exception must be able to receive electronic invoices from 1 January 2025. According to current knowledge, this applies, among others, to landlords, doctors and PV system operators. As there are still some unclarified issues, there may be a further delay. A clarification from the Federal Ministry of Finance (BMF) is still expected.

The sending of e-invoices is also mandatory for all companies. In this regard, the following transitional regulations are to be observed:

• Companies with a previous year’s turnover > € 800,000 in the B2B sector must send e-invoices from 1 January 2027. Until 31 December 2026, “other invoices”, e.g. paper invoice, PDF invoice are permissible.
• Companies with a previous year’s turnover < € 800,000 in the B2B sector may still send “other invoices” until 31 December 2027.
• From 1. January 2028, all companies in the B2B sector must also be able to send e-invoices.

Anyone who does not yet use an e-invoice between 1 January 2025 and 31 December 2027, but sends another digital format such as a PDF invoice, is required to obtain the recipient’s consent.

There is no e-invoicing obligation in the B2B sector for non-taxable or tax-free deliveries and services, small-value invoices under EUR 250 and travel tickets. There are currently no plans to make e-billing mandatory for consumer business (B2C).

Anyone who does not fulfill their obligation to participate in e-invoicing as prescribed or does so too late may risk tax disadvantages and fines of up to EUR 5,000.

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