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E-Invoices for B2B Transactions – New Requirement in Germany Starting 2025.

eRechnungen bzw. E-Rechnung für B2B – Software für Agenturen, IT-Dienstleister und BeratungenEnglish image not yet available...

In the EU, and thus in Germany, electronic invoices in the B2B sector will soon become mandatory. Germany will first require the receipt of e-invoices starting in 2025. Here, we provide an overview of the plan and status for Germany – and how it is considered in MOCO (updated 11/25/24).

Timeline for Germany

The introduction will be gradual starting January 1, 2025:

Step 1 from 01/01/2025 – Incoming Invoices
Every entrepreneur receiving services from other domestic entrepreneurs must be able to receive and process e-invoices (the previously required consent to receive an e-invoice is no longer necessary).

Step 2 from 01/01/2027 – Outgoing Invoices
There are various transition periods planned for creating e-invoices (§ 27 Abs. 39 UStG-E): Until the end of December 2025, paper and PDF invoices are still allowed. If revenue is below 800,000 EUR in 2025, the deadline extends to the end of 2026. By January 1, 2027, paper and PDF invoices in the B2B sector should be a thing of the past.

What this means for you: Your company must be able to receive an e-invoice after the turn of the year. 

Background: EU Initiative

The EU Commission has taken initial steps to curb VAT fraud with the VAT in the Digital Age Initiative (ViDA). The introduction for the entire EU is planned for January 1, 2028.

In Italy, for example, the e-invoice has been mandatory for some time and has been very successful in reducing tax fraud.

Germany also plans to gradually introduce mandatory e-invoicing for national B2B transactions starting January 1, 2025, as part of the Growth Opportunities Act.

"VAT in the Digital Age (ViDA)" Overview
  • Measure: It involves the introduction of e-invoicing for intra-community transactions – the e-invoice is to become the standard. 
  • Timeline for introduction: From January 1, 2025, specific requirements for an e-invoice apply: a structured electronic format in XML that allows for automatic and electronic processing. From 2025, transmission should occur without the invoice recipient's consent.
  • Transitional regulations until 2028: Paper invoices and other electronic formats (e.g., PDF) will continue to be temporarily accepted.
  • Mandatory from January 1, 2028: The e-invoice will be mandatory for intra-community transactions from January 1, 2028.
  • Mandatory information: IBAN of the service provider and the payment due date.
  • Challenges: Collective invoices will no longer be permitted, and invoicing must occur no later than 2 business days after service delivery.
There is political resistance. The Economic Policy Committee (ECON) proposes at least a one-year delay, and the EU Parliament advocates for a relaxation of the timeline. Therefore, the final timeline is currently uncertain.

Implementation in Germany: The Growth Opportunities Act

  • Measure in Germany: EU member states are now striving for national-level introduction. Germany wants the Bundestag to comprehensively revise § 14 of the Value Added Tax Act (UStG) with the Growth Opportunities Act and establish e-invoicing for national B2B services in Germany as the standard procedure. The Bundesrat's approval was granted on March 22, 2024.
  • Affected are: Domestic B2B transactions: Services according to § 1 Abs. 1 Nr. 1 UStG, provided both parties involved (entrepreneurs) have their headquarters, management, a VAT-relevant permanent establishment, or their residence or habitual abode in Germany. This is required according to § 14 Abs. 2 Satz 6 UStG-E.
  • Exceptions: According to the draft, small invoices up to 250 euros and travel tickets are exempt.

Definition of E-Invoice

The draft law defines an e-invoice as an invoice issued, transmitted, and received in a structured electronic format that enables electronic processing.

OLD: Paper and PDF invoice
NEW: Structured format that enables electronic processing

The well-known hybrid formats XRechnung and ZUGFeRD (from version 2.2) generally meet the planned legal requirements. 
  • XRechnung: This is a data format that has already established itself in public procurement invoicing (B2G). 
  • ZUGFeRD: The format generates a human-readable PDF file alongside an XML file as a so-called hybrid format.

MOCO + E-Invoice

More and more companies expect their business partners to be able to receive and send electronic invoices. Therefore, the pressure to switch is growing, regardless of national or EU legislative timelines.

MOCO offers you this functionality within the subscription.

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