Are you ready for Germany’s eInvoicing legislation?

This new requirement, part of a broader trend towards continuous transaction controls (CTCs) across Europe, aims to improve tax compliance, reduce fraud, and streamline the invoicing process.

For companies already utilising Transalis for Electronic Data Interchange (EDI), this shift to mandatory eInvoicing might seem like just another regulatory hurdle. However, with the right understanding and preparation, it can also be an opportunity to enhance your financial processes and ensure long-term compliance, not only in Germany but across other markets as well.

The global challenge of CTC and eInvoice mandates

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Overview of B2B eInvoicing in Germany

The worldwide push for eInvoicing is largely driven by governments seeking to reduce tax evasion through enhanced digital oversight of financial transactions, often via Continuous Transaction Controls (CTC).

While many countries have adopted CTCs requiring real-time invoice validation by the government, Germany has opted for a more gradual approach focused on digital transformation. This approach allows businesses to prepare for more stringent regulations expected in the future, particularly in line with the European Union’s VAT in the Digital Age (ViDA) initiative, which sets a compliance deadline of July 1, 2030.

In June 2024, the Federal Ministry of Finance (BMF) in Germany released a Draft Letter offering detailed guidance on the upcoming eInvoicing mandate under the Growth Opportunities Act. This document outlines crucial aspects such as timelines, accepted formats, transmission methods, and exemptions.

You can find information on digital tax mandates for other countries on our eInvoice Country Directory

Important German eInvoice deadlines

Germany’s eInvoicing mandate will be introduced in stages, providing businesses with time to adjust to the new requirements. Here are the key dates to be aware of:

• January 2025: All businesses in Germany must have the capability to receive and process eInvoices that meet the EN 16931 standard.
• January 2027: Companies with an annual turnover exceeding €800,000 must begin issuing eInvoices.
• January 2028: Issuing electronic invoices becomes mandatory for all businesses in Germany.

Exemptions

Certain types of invoices are exempt from these requirements, including:

• Invoices with a total amount of €250 or less
• Invoices for tax-exempt services under Section 4 (numbers 8-29) of the German VAT Act
• Travel tickets

Submission and reporting guidelines

Germany’s eInvoicing mandate requires that electronic invoices be in a structured format that conforms to the EN 16931 standard. Acceptable formats include:

• Universal Business Language (UBL)
• UN/CEFACT: Cross Industry Invoice (CII)
• ZUGFeRD: A hybrid format that combines a PDF/A-3 with an embedded CII and is widely adopted in Germany 

Starting from January 2025, traditional formats like paper or simple PDF invoices will be categorised as “other invoices.” These formats will only be valid until the end of 2026, after which they must be replaced by compliant eInvoices.

Transmission methods

To meet the new requirements, businesses must be equipped to receive eInvoices electronically. The simplest method is to provide an email address dedicated to receiving these invoices. Alternatively, businesses may agree on different transmission methods, such as Peppol, AS2, or SFTP. Invoices can also be made available for download through a customer portal.

Storage obligations

Under the new rules, eInvoices must be stored in a manner that guarantees their authenticity, integrity, and readability. Proper storage is crucial for compliance and for retaining the right to deduct input VAT.

What this means for your business

To comply with the January 1, 2025 deadline, businesses must ensure they have the necessary infrastructure to receive and process eInvoices electronically. While initially, setting up an email address to receive these invoices may suffice, many companies might choose to modernise their accounts payable and receivable systems, automating their eInvoice processing in anticipation of the mandatory issuance requirements that will come into effect in 2027 and 2028.

Germany is taking a relatively slow approach to mandatory digital tax reporting, but many other countries are speeding ahead with their regulations, often with punitive penalties for businesses that fail to comply. Find out more on the potentially high stakes of ignoring Continuous Transaction Control and eInvoicing mandates.

Transalis eInvoicing Solutions

If you’re already a Transalis EDI client, you’re familiar with the benefits of efficient, transparent document exchange. The upcoming eInvoicing mandate in Germany presents an opportunity to further optimise your financial processes. To find out more see, 5 reasons why it’s time to switch to eInvoicing.

Transalis is here to help your business navigate these changes, ensuring compliance not only with German regulations but also with future global eInvoicing mandates.

• Basic eInvoicing setup: For businesses that need a simple solution to meet the initial compliance deadline, Transalis offers a portal-based eInvoicing system. This setup allows you to efficiently receive and process eInvoices with minimal disruption to your existing processes.
• Integrated eInvoicing solution: For companies anticipating more extensive eInvoicing needs, Transalis provides a scalable, integrated solution that connects seamlessly with your existing ERP systems. This ensures your invoicing processes are not only compliant with German regulations but also future-proof for global mandates.

Future-proof your business with Transalis

The eInvoicing mandate in Germany is part of a larger global movement toward digital tax compliance. By partnering with Transalis, you can ensure that your business is prepared for the 2025 deadline and well-equipped to handle future compliance requirements in other countries.

Whether you need a basic eInvoicing portal or a fully integrated solution, Transalis offers the expertise and technology to help you stay compliant, efficient, and ahead of the curve. Contact us today to find out how we can support your business.

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