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German e-invoicing agreement doubts

Parliament talks grapples with e-invoicing launch legislation; Bundestag backs latest draft

On 23 February, the German Bundestag voted in favour of legislation introducing mandatory e-invoicing between 2025 and 2028 (see diagram below).

On 21 February, attempts to agree on German legislation including mandatory e-invoicing failed to reach a full compromise.  A Mediation Committee between the Parliament’s Bundestag and Bundesrat was seeking to settle the Growth Opportunities Act (“Wachstumschancegesetz”). Whilst most parties agreed to draft changes, the CDU/CSU-led Union parties withheld their backing, seeking more funding cuts.

The final legislation will now be voted on at the Federal Council (Bundesrat) on 22 March, and would need Union backing to pass. The Council has initially blocked the law because it led to loss of revenue among the federal states

The ruling coalition government believes the additional revenues expected by the removal of VAT fraud from e-invoicing could amount to between 11 billion and 14 billion euros annually.

One important compromise agreed at the end of 2023 from the Buderstag was to allow the continued use of  existing EDI structured e-invoices long term if both parties agree (see diagram below).

Oct 2023 Bundesrat proposes moving mandatory 2025 e-invoice acceptance to 2027

Germany’s Bundesrat has called for a 2 year delay to January 2027 for the introduction of the obligation for businesses to accept e-invoices. The current proposed schedule, see above, is to require businesses to accept e-invoices from January 2025 (although paper may still be used for 1 year), and then move to e-invoices-only for most business from January 2026.

The Bundesrat is the legislative body representing the 16 federal states at the federal level. It is scheduled to review and approve the proposed e-invoicing law in December. This would follow the current Bundestag review, expected to conclude in November.

Whilst the Bundesrat backs the introduction of mandatory e-invoicing, its concerns include:

  • timing for companies to prepare for the proposed launch, and feasibility of the phased switch (see graphic below). This includes details on how current formats (ZUGFeRD and XRechnung) may conform during the transition and if EDI procedures may continue in some form;
  • the extent of the costs for businesses to adapt and whether proportionate to the tax benefits, especially the adoption of the standard EN 16931 format;
  • plus the challenges for all 16  Länder (federated states) of Germany.

10 Oct Phased mandatory B2B domestic e-invoices

Germany’s Federal Ministry of Finance (BMF) has provided new timelines for proposed changes to paper and e-invoicing rules. This includes the obligation for taxpayers to be able to receive structured e-invoices (e.g. XML; XRechnung) from 2025. However, this exceptionally tight deadline and the form of the regime, e.g. pre-clearance, remain in question with the Bill not yet debated and EU ViDA e-invoice doubts. The mandate covers domestic transactions between German resident businesses.

The draft Bill (Growth Opportunities Act) is now in the Bundestag for debate, modifications and approval:

  • 10 November Bundestag approval
  • 15 December Bundesrat approval
  • 1 January 2025 enters into law

27 July Council of EU approves mandatory German e-invoicing; delayed launch proposal January 2026

The request by the European Commission on behalf of Germany to introduce mandatory B2B domestic VAT e-invoicing was approved by the Council of the European Union on 25 July. This allows Germany to impose real time e-invoicing which it is now proposing for 1 January 2026.

The request was backed by the EU Commission in June (see below) to authorise Germany to derogate from the EU VAT Directive and its requirement for paper-based invoices. Germany will be permitted to impose e-invoices until the end of 2027 when there will be a further review.

Learn about VATCalc’s VAT e-invoicing product, which not only creates and submits e-invoices to global tax authorities, but is unique in providing full audit against local tax legislation. And since it is built on the same application as our VAT Filer, all of your sales or purchase e-invoices are fully reconciled to your VAT returns.

17 July 2023: Mandatory domestic live e-invoicing proposals delayed to 1 Jan 2026

Germany’s BMF has revised proposed mandatory domestic e-invoicing imposition to 1 January 2026.  During a phased implementation from January 2025, e-invoices would become redefined and legalised, but paper or PDF invoices may still be issued until 31 December 2025 – and one year later for businesses with a turnover not exceeding €800,000 per annum.

Full structured e-invoicing only had originally been proposed from  January 2025. But, following a public consultation on a BMF discussion document, this has been postponed to 2026. This reflects recent calls for delays in the EU VAT in the Digital Age 2028 e-invoicing obligations, which covers intra-community B2B transactions only.

The new timeline is contained within outline BMF proposal – “Growth Opportunities Act‘. Other revised points following the consultation include:

  • January 2025, e-invoices will be redefined as structured e-invoices;
  • During the voluntary 2025 period, the same German invoice rules, disclosures and timelines would apply to e-invoices;
  • By 2028, they must comply with EN 16931, EU’s e-invoicing Directive. Further clarifications and legal definitions are required since this requirement at present would not become effective until 1 January 2028. This means any electronic format could be acceptable until 31 December 2027.
  • All mandatory e-invoicing rules would only apply to German resident taxpayers for domestic transactions – which would include foreign entities with a Fixed Establishment in Germany;
  • No reference is made to the reporting model – whether pre-clearance or not – but it will likely follow the ViDA lead and therefore no government pre-approval stage required. Also there will likely be a role for e-invoicing agents.

Germany’s application to the EC lasts until December 2027. However, the EU is proposing to remove this requirement to seek its approval to deviate from the EU VAT Directive on e-invoicing from 1 January 2024. This is part of the ViDA reforms.

April 2023 – discussion document from Ministry of Finance

The BMF issued a discussion document in April 2023 around its proposed mandatory e-invoicing live reporting regime.  The consultation ended 8th May 2023.

This proposal follows a 2022 commitment from the new coalition government to introduce a digital reporting regime to help tackle the VAT Gap.

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.

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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.

If you want live updates on these changes, sign-up for our free regular global VAT/GST newsletter.

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 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).

Europe e-invoicing and live reporting

Country Date Comments (click for details)
EU e-invoice proposals 2030? Digital reporting and e-invoicing harmonisation
Albania Jan 2021 Authorised e-invoice software and pre-clearance
Belgium Jan 2026 Phased introduction of B2B e-invoices
Bulgaria TBC Public consultation on pre-clearance model e-invoice
Croatia Jan 2026 B2B mandatory e-invoicing
Denmark 2024 Digital record keeping obligations
Estonia 2025 Suppliers must offer customers e-invoicing option
Finland Apr 2020 Customer option to require B2B e-invoices
France Sep 2026 E-invoicing and e-reporting for B2B and B2C
Germany Jan 2027 B2B mandatory e-invoicing proposals
Greece 2025 e-invoicing based on exiting myDATA digital reporting
Hungary Jul 2018 RTIR live invoice reporting. No govt pre-clearance required
Jan 2024 eVAT pre-filled returns based on live invoice reporting
Italy Jan 2019 Micro businesses join SdI e-invoicing Jan 2024
Ireland TBC Public consultation underway
Latvia 2025 B2B e-invoices based on PEPPOL
Lithuania ? E-invoicing platform being scoped
Montenegro TBC B2B mandatory e-invoicing preparations
Netherlands No mandate planned Unlikely to adopt domestic reforms
Poland 2025 B2B mandated e-invoicing
Portugal Jan 2024 Certified invoicing software for non-residents
Jan 2024 ATCUD digital invoice signature for non-residents
Romania Jul 2024 RO e-invoicing implementation
Russia TBC Extension of Traceability Model to B2B on hold
Serbia Jan 2023 B2B e-invoicing
Slovakia 2025 B2B and B2C e-invoice rollout
Slovenia 2025 ? e-SLOG B2B proposal stalled
Spain 1 Jul 2017 SII live invoice and book reporting
Spain 2 Jul 2025 Pre-clearance B2B e-invoices; supplement to SII
Sweden TBC PEPPOL based mandatory e-invoicing
Turkey Jan 2014 e-invoice e-Fatura and e-Arşiv
UK Apr 2022 MTD for VAT extended to 1.1million taxpayers

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