Mandatory Electronic Invoicing to Take Effect in Germany by 2025
From 1st January 2025, a significant change is coming to the invoicing landscape in Germany. All businesses in the country will be required to receive structured electronic invoices compliant with the European standard EN 16931 for B2B transactions. This marks the beginning of a digital transformation in invoicing, with more stringent regulations to follow.
Starting from 1st January 2026, it will become mandatory for all VAT-registered businesses to issue and accept e-invoices in domestic B2B transactions. The official formats will be XRechnung and ZUGFeRD, both EN 16931 compliant. Paper invoices or non-compliant electronic formats will no longer be accepted for VAT purposes.
For B2G (business-to-government) transactions, electronic invoicing has been mandatory for public entities in Germany since April 1, 2025, with certain regions such as Rhineland-Pfalz leading the way. Public sector bodies require invoices in the XRechnung XML format for quicker integration.
Key requirements for the new electronic invoicing system include real-time fiscalization, secure storage, and validity for VAT deduction. Real-time fiscalization means that both invoice issuers and recipients must “fiscalize” invoices in real-time from September 1, 2025, with a grace period until January 1, 2026 to be fully compliant. E-invoices must be stored securely for 8 years (10 years for full accounting documents). Only e-invoices fully compliant and approved by tax authorities qualify for VAT deduction.
Exemptions include foreign suppliers without a German establishment and simplified invoices under €250. The phased rollout for issuing e-invoices means that while all must accept e-invoices as of January 2025, mandatory issuance is phased until 2028 for all domestic B2B transactions, with large companies required to comply earlier.
Here's a summary of the formats and technical standards:
| Requirement | Details | |---------------------------------|------------------------------------------------------------| | Standards for e-invoices | EN 16931 European Standard | | Accepted Formats | XRechnung (XML for public sector), ZUGFeRD (XML+PDF hybrid) | | Mandatory Issuance Date (B2B) | January 1, 2026 | | Mandatory Acceptance Date (B2B) | January 1, 2025 | | Mandatory for B2G | Since April 1, 2025 (public sector entities) | | Invoice Storage | 8 years (10 years for accounting documents) | | Real-time Fiscalization | Required from September 1, 2025, with compliance by Jan 1, 2026 |
For businesses operating in or with Germany, systems like SAP must integrate with these e-invoicing formats and channels—including Peppol and direct API—to comply with the digital invoicing mandate.
In essence, from 2025 onwards, German law requires all B2B and B2G invoices to be electronic, structured, standardized (EN 16931-compliant), and electronically stored. Mandatory issuing of electronic invoices for domestic B2B transactions will come fully into force by 2026, and for all by 2028. Companies with offices in Germany will have to comply with the new requirements for transmitting and storing electronic invoices.
Intesa, a leading provider of electronic invoicing services, has developed a dedicated service for Italian companies with German branches that have a German VAT ID, enabling them to adapt their foreign branches to send and receive electronic invoices in compliance with local regulations. The solution is designed to adapt to future electronic invoicing requirements in other European countries.
For more information on the technical instructions for complying with the electronic invoicing obligation, businesses can refer to the "BMF-Schreiben" published by the Bundesministerium der Finanzen on 15 October. The PEPPOL network can be used for the transmission and exchange of electronic invoices with Germany. Starting from 1st January 2025, electronic invoicing will be mandatory in Germany for all B2B and B2G transactions, with the transmission of electronic invoices taking place through secure channels that allow direct transaction control by the tax authorities. Intesa already manages the archiving of fiscal documents in Germany.
Businesses should also note that from 1st January 2027, the obligation to use electronic invoicing will be extended to companies with a turnover of more than 800,000 euros. The formats XRechnung and ZUGFeRD (updated versions) will always be accepted in Germany for the structured and standard-compliant electronic transmission of invoices.
- Compliance with the digital transformation in invoicing will become mandatory for all VAT-registered businesses in Germany, as they will need to issue and accept e-invoices in domestic B2B transactions using formats like XRechnung and ZUGFeRD, both adhering to the EN 16931 standard.
- For businesses operating in or with Germany, effective financial management will require integration of their systems, such as SAP, with e-invoicing formats and channels like Peppol and direct API, to ensure compliance with the electronic invoicing mandate.
