E-invoicing: obligations in 2025, 2027 and 2028 at a glance

When does the e-invoicing obligation apply?

The obligation has applied since 1 January 2025 in two stages: every business must be able to receive e-invoices immediately, but only has to issue them after the transitional periods end on 31 December 2026 or 31 December 2027. The legal basis is § 14 UStG as amended by the Growth Opportunities Act (Wachstumschancengesetz) of 27 March 2024; the transitional rules are in § 27(38) UStG. The tax authorities explain the rules in the Federal Ministry of Finance (BMF) circulars of 15 October 2024 and 15 October 2025.

More will follow: the Federal Ministry of Finance has announced the introduction of a reporting system that transmits certain invoice details promptly to the tax authorities “at a later date”. For cross-border supplies between businesses in the EU, Directive (EU) 2025/516 of 11 March 2025 introduces digital reporting obligations and e-invoices under EN 16931 from 1 July 2030.

What is an e-invoice, and what isn't?

An e-invoice is a structured data set that software can read without retyping. A PDF file, a scan or a Word file is not an e-invoice but an “other invoice”, even if it arrives by email.

The format must comply with the European standard EN 16931 (§ 14(1) sentence 6 no. 1 UStG) or be agreed between the parties and allow the mandatory details to be converted correctly and completely into such a format (no. 2 and sentence 7); this is the route for EDI procedures, i.e. direct data exchange between the systems of two business partners. All mandatory VAT details must be in the structured part. A reference to an attachment, such as a PDF file in which the mandatory details are unstructured, is not enough, and neither is a link to an external destination.

Since the BMF circular of 15 October 2025, the tax authorities have distinguished between two types of error. A file with format errors, such as an XML file that does not conform to the permitted syntax, is not an e-invoice but an other invoice. Breaches of business rules with no VAT relevance, such as a missing “Buyer reference” field (BT-10) in an XRechnung, are irrelevant for VAT purposes. If, however, a mandatory detail under § 14(4) UStG is missing or wrong, the invoice is not a proper invoice.

Who does the obligation apply to, and who not?

The obligation applies to invoices between two businesses that are both established in Germany, where the supply is made for the recipient's business (§ 14(2) sentence 2 no. 1 UStG). It also applies to self-billed invoices, to supplies for which the recipient owes the tax (§ 13b UStG, reverse charge), and if the recipient is a small business or only makes tax-exempt supplies, for example as the landlord of a flat.

For federal contracts, an older, separate obligation applies: suppliers must submit invoices to federal authorities electronically via an administration portal, generally in the XRechnung standard and with a Leitweg-ID (routing ID) that assigns the invoice to the right office. Direct contracts up to €1,000 are exempt (§§ 3 to 5 ERechV). The federal states and municipalities regulate this in their own rules.

E-invoicing for small businesses (§ 19 UStG)

Small businesses do not have to issue e-invoices, but since 1 January 2025 they must be able to receive them. Since 2025, you count as a small business if your total turnover did not exceed €25,000 in the previous year and does not exceed €100,000 in the current year (§ 19(1) UStG).

• Issuing: invoices from small businesses may always be sent as paper or PDF invoices (§ 34a sentence 4 UStDV, the German VAT Implementing Ordinance). A PDF requires the recipient's consent; this requires no particular form and can also be given tacitly.
• Electronic by choice: small businesses may send an e-invoice to domestic businesses at any time without asking first.
• Receiving: the obligation to be able to accept e-invoices also applies to small businesses (Section 14.1(5) UStAE). An email inbox and a viewer program are enough.
• Mandatory detail: every invoice must state that the small business VAT exemption applies (§ 34a sentence 1 no. 5 UStDV).

Receiving e-invoices: what has applied since 1 January 2025

Since 1 January 2025, every domestic business must be able to accept e-invoices; the issuer does not need the recipient's consent for this, and an email inbox is enough. A separate inbox just for e-invoices is not necessary.

Anyone who refuses to accept e-invoices or cannot receive them technically has no right to a paper invoice. The issuer has fulfilled its obligation if it has issued an e-invoice and can prove that it tried to transmit it, for example with a transmission log (Section 14.1(5) UStAE). You can only read the XML file with a viewer program. Accounting programs with e-invoice import display it; the tax authorities offer the e-invoice viewer in the ELSTER portal.

The technical check of an e-invoice, validation, does not replace checking quantity, price and VAT rate. You may rely on its result regarding format and business rules if you exercise due care; according to the BMF circular of 15 October 2025, it makes sense to keep the validation report as evidence. As long as suppliers still send PDF invoices, their details can also be transferred to a table with AI; how this works and where the limits are is shown in the article Converting PDF to Excel.

XRechnung or ZUGFeRD?

Both formats meet the obligation: XRechnung is a pure XML data set, ZUGFeRD a PDF file with an embedded XML file. ZUGFeRD counts as an e-invoice from version 2.0.1, except for the MINIMUM and BASIC-WL profiles (Section 14.1(14) UStAE).

XRechnung is the German standard implementing EN 16931; it is maintained by the Coordination Office for IT Standards (KoSIT). Which permitted format two business partners use is a civil-law question that they settle between themselves (Section 14.1(12) UStAE). If you already exchange invoice data with customers via EDI, you may continue to do so until the end of 2027 with their consent, and after that only if the mandatory details can be converted correctly and completely into a format under EN 16931.

Both formats can be created with invoicing or accounting programs that have an e-invoice export; before sending the first one, use validation to check whether the file complies with the standard. For invoices to federal authorities, the federal government's invoice receipt platforms also offer web entry, a guided form for creating and submitting invoices; it is not intended for invoices to businesses. A service provider may also issue invoices in the name and on behalf of the business (§ 14(2) UStG); the business must then ensure that the formal requirements are met.

How long must you keep e-invoices?

Eight years, counted from the end of the calendar year in which the invoice was issued (§ 14b(1) UStG). The Fourth Bureaucracy Relief Act shortened the period from ten to eight years; it applies to all invoices whose retention period had not yet expired on 31 December 2024, and to banks, insurers and investment firms one year later (§ 27(40) UStG). § 147(3) AO (German Fiscal Code) also provides for eight years for accounting vouchers. However, the period does not expire as long as the documents are relevant for taxes whose assessment period is still running.

How do you switch your business to e-invoicing?

Start with receiving, because that is already mandatory, and then set your own cut-off date for sending. Most of the work lies in master data and processes, not in the software. How AI can help with receipts and bookings is described in the article AI in accounting; what to check before using AI tools with customer data is in the article ChatGPT at work.

1. Set up receiving

   Define an address for incoming invoices and tell your suppliers, provide a viewer program or import into your accounting, and decide who checks, approves and files.

2. Check master data

   For each business customer, record: established in Germany, invoice email address, order or reference number, and for authorities the Leitweg-ID. For suppliers: who is already sending e-invoices?

3. Choose software

   A program with export to EN 16931 (XRechnung or ZUGFeRD from 2.0.1, not MINIMUM or BASIC-WL) and an import with validation. Agree with your tax adviser how the data gets into the bookkeeping.

4. Adapt processes

   Switch approval, account assignment, payment and archiving to the XML file, and decide what happens with format or content errors: reject and request a corrected e-invoice.

5. Test and set the cut-off date

   Exchange test invoices with a few customers. Latest cut-off date for sending: 1 January 2027 if total turnover in 2026 exceeded €800,000, otherwise 1 January 2028.

Frequently asked questions