E-Invoicing in Germany

by | Jan 5, 2024 | E-invoicing

Updated – June 3d, 2024

Electronic invoicing in Germany isn’t all that simple. Specific regulations vary across the country, so here’s everything you need to know, including important deadlines per state.

Overview

As with other countries in the European Union (EU), the EU e-invoicing Directive 2014/55/EU made it clear that Germany had to make business-to-government (B2G) e-invoicing mandatory from April 18th, 2020. In this blog you will read everything you need to know about e-invoicing in Germany, including important deadlines by state.

German E-Invoicing Standards: XRechnung vs. ZUGFeRD

As of April 18th, 2020, all government agencies in Germany have to be able to receive and process e-invoices according to a standard in line with EU requirements. The e-invoicing regulations of the German federal government stipulated that XRechnung is the preferred standard for B2G e-invoices. This standard was developed by the German Coordination Office for IT Standards (KoSIT) and is an invoice format based on XML. The current XRechnung standard allows two XML formats for electronic invoicing: UBL or UN/CEFACT Cross Industry Invoice (CII).

Although XRechnung is preferred by the Federal Government, ZUGFeRD can also be used, as ZUGFeRD also complies with the European Standard. It consists of two components: a PDF file and an embedded XML file. ZUGFeRD is based on the UN/CEFACT CII standard and the ISO standard PDF/A3.

The German Peppol Authority: KoSIT

KoSIT became the German Peppol authority in June 2018, with the responsibility of maintaining XRechnung. KoSIT is part of the E-Government department within the core administration of the Free Hanseatic City of Bremen and is a permanent organization of the National IT Planning Council.

KoSIT’s main tasks are to assist the IT Planning Council in adopting IT interoperability and IT security standards, as well as to manage joint federal and state e-government projects.

Deadline Compliance

You might assume that all government agencies in Germany have been able to receive e-invoices since April 18th, 2020. In reality, there are still public authorities—especially in the municipal sector—that cannot yet receive and process electronic invoices. This has to do with the federal structure, as all 16 federal states have their own constitutions, parliaments, and governments. In other words, it is usually the responsibility of each individual federal state to apply European requirements.

The structure, scope, and timing of electronic invoicing implementation is defined by the E-invoicing Act (E-Rechnungsgesetz) along with the associated ordinances of the respective state authorities in the individual federal states.

At state level, however, 16 separate laws and ordinances had to be drafted, optimized, and implemented on the basis of the EU Directive and the European Standard. To date, there are still federal states that have yet to issue regulations, and the ordinances that have already been issued may vary.

B2B E-Invoicing Obligation in Germany

From 2025, B2B companies in Germany will be obliged to receive e-invoices. The reason for this is the amendments to Section 14 UStG, in which a mandatory electronic invoice is also to be introduced in the B2B sector. On August 31, 2023, the Federal Cabinet approved this draft of the Ministry of Finance for the Growth Opportunities Act. On November 17, 2023, the Bundestag also passed the Growth Opportunities Act.

On February 23, the Bundestag approved the compromise on the Growth Opportunities Act. After intensive political disputes between the federal and state governments, the Bundestag passed the Growth Opportunities Act without the climate protection investment premium on Friday, February 23, 2024.

On March 22, 2024, the Bundesrat approved the Growth Opportunities Act. According to the current draft of the Growth Opportunities Act, all domestic companies must be able to receive and archive electronic invoices from January 1, 2025. The e-invoice articles therefore remain unchanged.

For B2B (business-to-business) transactions, the requirements currently in the legislative process mean the end of paper invoices and unstructured PDFs. There is probably not much time left for implementation:

  • The obligation to receive will begin as early as 2025, the obligation to send two years later;
  • By 2028 at the latest, even small companies will only be allowed to send electronic invoices to their business partners;
  • All companies must be able to read and understand XML invoices.

How Can You Send E-Invoices in Germany?

As mentioned above, because of the varying regulations in Germany, there are many different specifications, threshold conditions, and technical approaches from state to state. It is important for B2G suppliers to know an consider these conditions.

For your convenience, here’s a list of recent deadlines for all of Germany:

January 1st, 2022: E-invoicing obligation for suppliers in Baden-Württemberg.

January 1st, 2022: E-invoicing obligation for suppliers in Saarland.

April 18th, 2022: Obligation to accept e-invoices below the thresholds and from EUR 1000 for municipalities, associations of municipalities, district offices and other legal entities under public law in Bavaria.

December 31st, 2022: Obligation to accept e-invoices at contract values from EUR 1000 and for the sub-threshold area in Berlin.

April 1st, 2023: E-invoicing obligation for suppliers in Mecklenburg-Vorpommern.

April 18th, 2023: Obligation to accept e-invoices for construction contracts below the thresholds in Bavaria.

January 1st 2024: E-invoicing obligation for suppliers in Rhineland-Palatinate.

April 18th,2024: E-invoicing obligation for suppliers in Hesse.

January 1st, 2025:Obligation to accept e-invoices for public customers of the indirect state administration, especially municipalities, in the Land of Brandenburg. This applies to both low- and high-threshold areas.

Below you can find the most important information at both federal and state level.

Aleksandra Vovchenko
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