The global trend towards mandatory e-invoicing is gaining traction as governments worldwide recognize the benefits of digitalization in modernizing tax administration processes. Germany has taken significant steps to embrace this trend, with the introduction of the Growth Opportunities Act mandating the use of electronic invoices for domestic business-to-business sales. The Act aligns with the EU’s proposal VAT in the Digital Age and aims to adopt the European e-invoicing standard EN 16931. The new law requires companies to issue electronic invoices starting in January 2027 for companies with turnovers exceeding €800,000, and in January 2028 for companies with turnovers below this threshold.
Businesses operating in Germany are required to issue invoices for supplies to other businesses, with some exceptions for exempt services. Electronic invoicing is currently compulsory only for public contracts, with other transactions subject to recipient acceptance. Invoices must be issued within specific timeframes for domestic and intra-EU transactions, with detailed content requirements outlined in German VAT law. While it’s not obligatory to include payment due dates or bank account details on invoices, it is considered good practice to do so.
The new e-invoicing mandate introduced by the Growth Opportunities Act focuses on the format of invoices rather than altering who should issue invoices or what information is required. Electronic invoices conforming to the EU standard EN 16931 will become the default invoicing method in Germany from January 1, 2025, with “other invoices” gradually being phased out until 2028. The obligation to issue electronic invoices applies to domestic B2B sales, with consent required for electronic transmission of non-compliant invoices. Intra-EU transactions are not subject to the e-invoicing mandate but will be covered by reporting obligations under the ViDA project.
The implementation timeline for the e-invoicing obligation spans from 2025 to 2028, with businesses needing to be equipped to receive structured electronic invoices adhering to the EN 16931 standard by January 1, 2025. The obligation to issue electronic invoices commences in 2027 for companies exceeding €800,000 in turnover, with all businesses required to issue electronic invoices by 2028. Businesses can choose to issue paper or other electronic format invoices in 2025 and 2026, provided recipient consent is obtained for the latter. The move towards mandatory e-invoicing in Germany reflects a global trend towards digitalizing tax processes and administration systems, with the phased approach aimed at facilitating a smoother transition for businesses.
Germany’s approach to e-invoicing regulations differs from other European countries by focusing on permitted electronic invoice formats rather than specifying exchange and reporting requirements. This approach aims to provide businesses with flexibility in how they send invoices while ensuring compliance with the mandated standards. The phased introduction of invoice data transmission to tax authorities will follow the mandatory e-invoicing rollout, allowing businesses time to adapt and comply with the new regulations. Overall, Germany’s implementation of mandatory e-invoicing signifies a proactive step towards digital transformation in tax administration processes, aligning with global trends towards modernization and compliance.
