German e-invoicing starting January 1, 2025

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On January 1, 2025, Germany's Ministry of Finance (BMF) implemented the initial phase of mandatory e-invoicing for B2B transactions.

This requirement applies exclusively to businesses that are residents of Germany, as well as foreign companies with a fixed establishment in Germany.

The rollout will occur in phases from 2025 to 2028, ultimately leading to all resident businesses being required to exchange structured e-invoices (such as EN16931 or equivalent) for domestic transactions. There is no obligation to report these transactions to tax authorities or to obtain pre-clearance.

Starting from January 1, 2025, suppliers can issue e-invoices, and their customers must be equipped to receive them. According to the BMF, the minimum requirement for e-invoicing is that "the provision of an e-mail inbox is sufficient for the receipt of an e-invoice." Alternatively, parties involved may agree on different methods for electronic data exchange.

As of January 1, 2025, all businesses operating in Germany must accept electronic invoices. Customers cannot claim deductions for non-compliant e-invoices without submitting an additional application to the tax authorities. E-invoices must be securely stored for eight years, while other accounting records must be retained for ten years.

The following types of transactions are exempt from the e-invoicing requirement and may continue to utilize paper or PDF formats:

  • Suppliers from foreign businesses without a German presence
  • Simplified invoices (amounting to less than €250)
  • Travel tickets
  • Micro businesses with annual sales below €100,000 in 2025 are only required to receive e-invoices, not to issue them
  • Business-to-consumer (B2C) transactions
  • Transactions exempt from VAT

E-invoices can be structured or hybrid, with a human-readable section. In cases of discrepancies, the electronic data will take precedence. They may be sent via email, electronic interfaces, or online portals but cannot be delivered on USB sticks. Any corrections must also be made in electronic format.

Issuers can assume that recipients are domestic entrepreneurs unless contrary information is available. Recipients who cannot accept e-invoices cannot demand alternative formats, and issuers meet their VAT obligations if they have documented their efforts to send e-invoices.

Recipients are responsible for ensuring compliance with e-invoicing regulations. Non-compliant documents, such as PDFs or paper invoices, are not valid for tax deductions.

  • What format of e-invoice is acceptable?
  • XRechnung
  • ZUGFerd 2.0.1 or later hybrid
  • Other recognized formats, e.g., French Factur-X or Peppol BIS
  • EDIFACT protocol if it still meets EU16931

KGT is a SAP partner for PE services and SAP Build partner, and to become an SAP partner, strict due diligence requirements must be met, including having certified SAP consultants. You can find us at: https://partnerfinder.sap.com/profile/0001925409

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KGT SAP add-ons for SAF-T, e-invoicing and MTD UK for VAT work as a standalone application within the SAP system and do not change existing customer SAP functionality or processes. It is fully configurable with a custom namespace /KGT.

KGT partnered up with SAP regarding 'SAP Advanced Compliance Reporting for SAP HANA'. The 'Advanced Compliance Reporting' (ACR) service enables you to configure, generate, analyze, and electronically submit statutory reports that contain indirect taxes, such as value-added tax.

KGT also provides S/4 HANA transformation support.

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