In 2025, Germany commenced a phased mandate for the implementation of structured electronic invoicing (e-invoicing) for business-to-business (B2B) transactions.
Initially, businesses were required to be capable of receiving e-invoices. The next significant milestone is set for 2027, when suppliers will be mandated to issue e-invoices for transactions that fall within the defined scope.
On October 15, 2025, the German Ministry of Finance (BMF) published an updated guidance letter outlining the three-year rollout plan for e-invoicing.
Key Highlights from the New BMF E-Invoicing Guidance:
1. Format Errors – Syntax Violations: An invoice is classified as having a format error if it fails to adhere to the accepted syntaxes or if mandatory VAT fields cannot be extracted from interoperable invoice formats. In such instances, the document will be treated as a non-compliant electronic format rather than a legitimate e-invoice.
2. Business Rule Errors – VAT Compliance Issues: Business rule errors occur when established regulations are breached, potentially resulting in content inaccuracies. Should these errors impact mandatory VAT information, the invoice is considered improper. The definition of a "critical error" has been relocated to paragraph 6b of the guidelines.
3. Invoice Validation Procedures: Businesses are encouraged to utilize a “suitable validation tool” to verify invoices against both format and business rules. However, the responsibility for ensuring the completeness and accuracy of the invoice content remains with the business owner. It is imperative that any validation reports generated are retained for record-keeping purposes.
Mandatory Invoice Requirements: E-invoices must include all required details directly within the structured e-invoice data, as references to attachments or external links do not comply with legal mandates. It is also important to note that opting for VAT is mandatory, even when VAT is applied voluntarily as per section 9(1) of the VAT Act.
For discounts or complaints concerning reductions in the taxable amount that do not alter the supply itself, invoice corrections are not necessary.
Retention Obligations: Taxpayers are required to retain both incoming and outgoing invoices for a period of eight years.
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
