Mandatory B2B domestic real-time e-invoicing reporting Jan 2025; likely phasing for medium & small enterprises
The Federal Ministry of Finance (Bundesministerium der Finanzen or BMF) has issued a discussion document this week around its proposed mandatory e-invoicing live reporting regime. The consultation will end 8th May 2023.
Key features under consideration include:
- Structured e-invoicing mandatory for live reporting to the tax authorities at the same time as issuing e-invoice to customers;
- New definition of structured e-invoices, based on ViDA, and out-of-scope invoices (use of PDF’s and paper invoices);
- Likely that taxpayers will be able to report via e-invoicing agents or similar outsourced services to the government and their customers at the same time – no pre clearance with the government required;
- Domestic B2B supplies only;
- No clarity yet if this includes non-residents issuing or receiving invoices for domestic transactions;
- Potential staggered introduction for small and medium sized taxpayers’ sales invoices – although they would still be obliged to receive purchase e-invoices from their German suppliers from 2025;
- Potential threshold for low-value invoices, which would then be phased out;
- Based on EU e-invoicing standard EN 16931, and the seller’s reporting would be obliged to verify complete reporting of all data fields; and
- Complies with EC’s proposed VAT in the Digital Age reforms – see 2028 Digital Reporting Requirements for Intra-Community supplies.
This proposal follows a 2022 commitment from the new coalition government to introduce a digital reporting regime to help tackle the VAT Gap.
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.
Update: since this announcement, the EC has proposed removing e-invoice derogation approval from January 2024. Once the feedback has been considered, a Bill will be submitted to Parliament.
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).
