How Germany’s E-invoicing Mandate will Change Your Business in 2025
In 2025, Germany will join the growing number of countries mandating electronic invoicing for B2B transactions. With the approval of the Growth Opportunities Act (Wirtschaftswachstumsgesetz), Germany is setting clear requirements for businesses to comply with electronic invoicing starting in January 2025. Is your company ready? Here's what you need to know to ensure your invoices comply with the mandate.
Key dates and implementation timeline for e-invoicing in Germany
The introduction of the mandatory e-invoicing in Germany will occur in phases, giving businesses time to transition:
- January 1, 2025 – All companies based in Germany must be able to receive CEN/EN 16931-compliant e-invoices for all VAT-taxed transactions. This marks the start of the mandate and the end of accepting paper invoices.
- January 1, 2027 – Germany-based companies with annual revenues exceeding 800,000 EUR must also begin issuing e-invoices that comply with the CEN/EN 16931 standard.
- January 1, 2028 – The mandate will extend to all companies based in Germany, regardless of size or revenue, requiring them to issue e-invoices for VAT-taxed transactions.
With these deadlines fast approaching, businesses need to begin preparing now to ensure they can meet the 2025 deadline for receiving electronic invoices.
What is an e-invoice?
The concept of an e-invoice can vary from country to country, but in Germany, it follows strict guidelines set by the European Standard on e-invoicing. The German definition of an e-invoice is based on the European Norm CEN/EN 16931, which outlines the technical and non-technical criteria for compliance. This standard ensures that e-invoices meet specific requirements for authenticity, integrity, and readability.
For an invoice to be compliant with the German mandate, it must:
- Be in a structured electronic format that complies with the CEN/EN 16931 standard.
- Ensure interoperability, allowing the invoice issuer and recipient to agree on the format as long as it meets the necessary criteria to extract required information.
- Guarantee the authenticity of the origin, the integrity of the content, and the legibility of the invoice. The invoice must be machine-readable and stored in a format that can be processed automatically.
- Unstructured formats, such as PDFs, JPEGs, or PNGs, are not accepted under the mandate.
- Non-compliant formats, such as EDIFACT, VDA, X12, or TRADACOM, are also excluded.
The formats that are widely used in Germany and compliant with the CEN standard are XRechnung and ZUGFeRD, which will be the primary formats for exchanging e-invoices.
E-invoice receiving options starting in 2025
The majority of the obligations under the new mandate apply to transactions between businesses within Germany, including foreign companies established in Germany. This requirement excludes B2C transactions and VAT-exempt transactions, which are not subject to the e-invoicing mandate.
Beginning January 1, 2025, all German companies must be able to receive e-invoices in CEN-compliant formats. The mandate also makes clear that businesses will no longer have the option to reject electronic invoices, and paper invoices will no longer take precedence. The use of CEN-compliant e-invoices will become the standard.
Invoice recipients will need to be ready to accept electronic invoices in formats such as XRechnung or ZUGFeRD, which are in line with European standards. This requirement makes Germany a leader in enforcing CEN compliance, as no other country has yet made such a mandate for electronic invoicing.
As we approach the implementation deadline, businesses will need to choose the right systems and solutions to ensure they can efficiently receive and process these electronic invoices. Your transition to a fully digital invoicing system will streamline processes, improve accuracy, and reduce administrative burdens in the long run.
Get ready for the German e-invoicing mandate
The upcoming B2B e-invoicing mandate in Germany is an important step toward digitizing business transactions and improving the efficiency of the invoicing process. Start preparing now to meet the compliance requirements. Make sure that your systems can receive CEN-compliant e-invoices and transition away from paper invoices.
The key takeaway is to act now - start planning and investing in the right technologies to ensure a smooth transition to a digital invoicing system.
Comarch’s e-Invoicing system is designed to simplify this process, offering seamless integration, PEPPOL compliance, and comprehensive support tailored to your business needs. So, don’t wait any longer - schedule a call with our expert today and take the first step toward hassle-free compliance.
There’s more you should know about e-invoicing in Germany – learn more about the new and upcoming regulations.
