April 2023 – Finance Ministry to publish B2B e-invoicing discussion paper. Will harmonise with EU’s VAT in the Digital Age Digital Reporting Requirements 2028 proposals
The Federal Ministry of Finance (Bundesministerium der Finanzen or BMF) has said that it will publish (likely April) a discussion paper on options to introduce mandatory e-invoicing. This follows a 2022 commitment by the new coalition government to introduce some digital reporting regime to help tackle the VAT Gap.
Since then, then EU’s Digital Reporting Requirements pillar of the VAT in the Digital Age (‘ViDA’) reforms has proposed mandatory intra-community structured e-invoicing from 2028.
It is not clear the scope or format of the German regime will be, but Germany is certain to adopt the EU standard on eInvoicing (EN 16931) as now proposed by ViDA.
Nov 2022: Germany applies for temporary departure from Articles 218 and 232 of VAT Directive to impose mandatory electronic invoicing on certain B2B transactions.
Germany is to follow Italy, France, Poland and others by introducing mandatory electronic invoices. It has commenced plans by seeking permission from the European Commission to do so – under the EU Directive rules, businesses must first seek their suppliers’ permission to adopt e-invoicing.
No implementation date has been set since there is no formal agreement within the government on adoption. But, ostensibly, this is because the German Ministry of Finance (BMF) wishes to have more details of the EU e-invoicing plans to ensure the interoperability of a possible German reporting system. Also, given that gaining permission can take up to one year, this can be seen as the Germans laying the ground as it determines its regime details. B2G e-invoicing has been mandatory since 2020.
But any German plans will confirm to the European standard for e-invoicing (EN 16931).
November 2021: Coalition new leaders confirm electronic invoice reporting system as soon as possible to fight VAT fraud; backing for EU definitive VAT system; import VAT reforms
The new German government coalition of the SPD, Free Democratic Party (FDP) and Green Party have now confirmed on 24 November 2021 plans to implement a country-wide live e-invoicing regime. It is envisaged that this will validate in real-time the creation of sales invoices by taxpayers, and then act as the forwarding channel for invoices to customers. This follows the Italian SdI model, with Continuous Transaction Controls (CTC), which in turn follows similar models adopted across South America and Asia Pacific.
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The new government has also restated its support for the proposed EU definitive VAT system, which aim to shift the EU VAT regime to a destination principle. Check VAT Calc’s global live VAT invoice transaction and e-invoice reporting tracker to see where else real-time submissions of invoices is being implemented. Our VAT Calculator can produce accurate invoice calculations and reporting globally.
The coalition has also committed to reform the import VAT rules to provide similar reverse charge relief as is common across the rest of the European Union. Read more about German VAT in our national guide.
Germany e-invoice proposal – FDP calls for e-invoicing
The German Bundestag parliament had called for the adoption of B2B mandatory e-invocing to help combat VAT fraud. This follows the successes in Italy, Hungary and plans for Poland and France in 2023. There is already a public platform for small and medium sized businesses to use, Zentrales Rechnungseingangsportal OZG-RE platform
Adoption of a standard German regime will be challenge given the independence of the 16 federal states.
The German Free Democratic Party leader, Christian Lindner (now the Finance Minister in the new government), had already raised the issue with a required: “calls for an electronic reporting system comparable to the Italian Sistema di Interscambio to be introduced nationwide as quickly as possible, which can be used for the creation, checking and forwarding of invoices.”
Germany B2G e-invoices
As per the requirements of the EU VAT Directive on e-invoicing, in April 2020, Germany mandated the acceptance of electronic invoices for Federal governmental transactions with the commercial sector, B2G.The format varies by state (Bundesland) as they adopt the legislation in their local laws. The states have the option of their own format (which should be PEPPOL compliant) or the recommended by Core Invoice User Specification (CIUS).