Germany has enacted significant modifications to its invoice archiving and VAT retention regulations, coinciding with the implementation of B2B e-invoicing, effective January 1, 2025.
Germany has enacted significant modifications to its invoice archiving and VAT retention regulations, coinciding with the implementation of B2B e-invoicing, effective January 1, 2025. These updates aim to modernize compliance with the GoBD (Principles for the Proper Management and Storage of Books, Records, and Documents in Electronic Form).
Key Changes to German VAT Invoice Regulations in 2025
1. GoBD Update: Structured E-Invoices
Effective July 14, 2025, the Federal Ministry of Finance has provided clarity on the archiving requirements for structured e-invoices:
XML as Legal Record: Only the XML component of e-invoices, including ZUGFeRD hybrids, is required to be archived. A PDF may be retained at the discretion of the user, provided a readable format can be generated.
Retention of Original Format: Invoices must be stored in their original received format, even if they are converted internally, to meet audit requirements.
Recognized Hybrid Formats: For ZUGFeRD or similar formats, the embedded XML is considered the tax-binding element.
Compliance with Electronic Archiving Standards: Electronic archiving practices must adhere to GoBD guidelines, ensuring real-time accessibility for tax authorities. Data must predominantly be retained within Germany.
2. Shortened Retention Period to Eight Years
A letter from the BMF dated July 8, 2025, has established a reduction in the invoice retention period from 10 years to 8 years for invoices whose periods had not expired as of December 31, 2024.
Invoices issued before January 1, 2017, are no longer required to be retained unless they remain pertinent for unresolved tax determination periods, such as input tax adjustments under §15a UStG related to real estate.
VAT records are unaffected by this alteration.
3. New Rule Regarding Unauthorized VAT in Credit Notes
Starting December 6, 2024, a new provision will come into effect regarding unauthorized VAT displayed in invoices or credit notes:
If an individual who is not a registered entrepreneur shows VAT in an invoice or credit note and does not promptly dispute the incorrect credit note, an unauthorized tax certificate will be issued.
This legislative amendment supersedes the 2019 BFH ruling (V R 23/19), which previously determined that credit notes did not fall under §14c(2) UStG in the same manner as invoices.
How Can KGT Support You?
KGT has created an SAP-integrated e-invoicing add-on solution for Germany, featuring outbound and inbound functionalities to meet tax reporting requirements. This add-on includes a data extractor and a cockpit for generating periodic electronic invoices in the legal format and controls before submission. When SAP DRC launched the German e-invoicing solution as part of its e-document offerings, KGT emerged as a leading consultancy firm for SAP DRC and tax services. Recognized as an SAP DRC partner for German e-invoicing services, KGT is one of SAP's recommended implementation partners for this solution. We provide comprehensive support, including installation, configuration, customization, and training, to help you maximize the long-term value of your SAP DRC investment.
KGT is an SAP partner for PE services and an 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
