E-Invoice
Background, requirements, and our
software solution for your company!
In January 2025, the e-invoicing requirement went into effect in Germany. Going forward, electronic invoices (e-invoices) must be received and processed. This means that companies must fully digitize their invoice processing to comply with the new legal requirements. Our software solution helps you meet these requirements and streamline your invoice processing efficiently and effectively.
Legal basis and requirements of the German Federal Financial Supervisory Authority (
) E-INVOICES IN GERMANY
According to Section 14(1) of the German Value-Added Tax Act (UStG), an e-invoice is an invoice that is issued, transmitted, and received in a structured electronic format and enables electronic processing. This regulation requires companies in Germany to receive only electronic invoices starting in 2025. The requirement for electronic invoicing applies exclusively to services provided between domestic German companies (B2B). This applies to both service providers and service recipients that are domiciled in Germany.
An e-invoice must be transmitted electronically in order to comply with the digital invoicing requirement. This means that the invoice may not be printed on paper, but must be sent exclusively electronically. This requirement ensures that the invoice is transmitted securely and efficiently and that recipients can process the invoice without any additional actions.
An e-invoice must be machine-readable in order to be processed by computers. This means that the invoice must be created in a structured format. This requirement ensures that the invoice can be processed automatically and efficiently without the need for human intervention.
An e-invoice must be media-consistent to ensure that the invoice does not switch between different media. This means that the invoice does not switch from one medium (e.g., paper) to another medium (e.g., electronic), but remains in a single medium.
An e-invoice must be able to be processed automatically in order to make invoice processing efficient and effective. This means that the invoice can be processed by computers without human intervention.
White paper on e-billing
BACKGROUND INFORMATION, FACTS, AND GUIDELINES
Prepare your business now for the e-invoicing requirement. Our white paper provides all the key information, from the legal framework and benefits to a practical checklist for the transition. Get started now and save time and money!
Mandatory e-billing—why exactly?
THE ADVANTAGES IN A NUTSHELL
The introduction of electronic invoicing (e-invoicing) in Germany marks the beginning of a new era in accounting. Although e-invoicing is now mandatory, the benefits of this new technology should not be dismissed. In addition to meeting legal requirements, e-invoicing offers companies numerous advantages.
E-billing eliminates the need for OCR extraction of content, which reduces the error rate. In addition, processing times and delivery are possible in real time, which increases time efficiency.
E-billing reduces postage and paper costs, as physical invoices are no longer required.
E-invoices can be transmitted digitally and securely, ensuring correct transmission and protection of your confidential data.
Each step of the process can be tracked precisely, ensuring greater transparency. The status and history of a transaction can be viewed at any time, and digital documents such as e-invoices are archived automatically in a space-saving manner, remain legible indefinitely, and any changes are logged.
What applies from when?
TRANSITION PERIODS IN GERMANY
The following deadlines apply until e-invoicing becomes mandatory in Germany in 2028.
As ofJanuary 1, 2025, companies must have the capability to process e-invoices.
Until the end of 2026, paper invoices or electronic invoices that do not comply with the new format may continue to be submitted for B2B sales made in 2025 and 2026.
Untilthe end of 2027, the issuance of paper invoices for business-to-business transactions taking place in 2027 will continue to be permitted. Digital invoices that do not comply with the new format are also permitted, provided that the issuer’s revenue in the previous year did not exceed 800,000 EUR.
StartingJanuary 1, 2028, all invoices must be electronic and comply with the new requirements.
Starting in January 2025, companies must have the general capability to receive e-invoices
to receive e-invoices !
Acceptable invoice formats
AND WHICH ONES WILL (SOON) NO LONGER BE ACCEPTED?
The introduction of mandatory e-invoicing in Germany also brings new requirements for invoice formats. Starting in 2025, only certain electronic invoice formats will be accepted, while others will no longer be valid. It is therefore important to know which formats are permitted and which ones must be phased out in order to comply with the new legal requirements.
It is processed directly in the invoice receipt process and is machine-readable. To ensure readability for humans, the XML file is often sent together with a PDF file. This PDF file is for human readability only and is not legally binding. These formats can be used across industries in the B2B and B2C sectors, which facilitates the digitization of invoice processing in many areas.
In this format, the data is structured in XML format and is machine-readable but not immediately “human-readable.” XRechnung has been in use in the German public sector (B2G) since November 2020 in accordance with the ERechV (E-Invoicing Regulation).
EDI or EDIFACT procedures may continue to be used for electronic invoicing. This is subject to the condition that the invoice details required under value-added tax law can be extracted correctly and completely from the format used, and that the format is interoperable with the European standard EN 16931. If an existing EDI procedure does not yet fully meet these requirements, it may, in principle, still be used until December 31, 2027, under the statutory transitional provision. Companies should therefore review the procedures they use from both a technical and legal perspective at an early stage and make any necessary adjustments.
A simple PDF invoice is not an e-invoice as defined by the Value-Added Tax Act, since it does not contain structured invoice data. An e-invoice must be issued, transmitted, and received in a structured electronic format and must allow for electronic processing. During the statutory transition periods, PDF invoices may continue to be used as other types of electronic invoices under certain conditions.
Digital invoice processing
RELY ON THIS TECHNOLOGY!
To fully leverage the benefits of e-invoicing and ensure seamless invoice processing, we rely on innovative technologies that are revolutionizing digital invoice processing. Whether you already process e-invoices directly or wish to continue digitizing incoming paper and PDF invoices using IDP during the transition periods, we support you in achieving efficient and end-to-end digital invoice processing.
We have over 20 years of experience in digitizing documents and processes in accounting and have developed a combination of our in-house solutions Buildsimple and Accounts Payable Flow to create the efficient, automated accounting of tomorrow, enabling end-to-end digital processing of invoices. Our solutions at a glance:
Accounts Payable Flow
Our solution for digital invoice processing
Automate your invoice processing procedures. From invoice receipt to verification and approval to posting, our specialized Accounts Payable Flow application provides you with comprehensive support for digital invoice processing, compliance with cash discount deadlines, and automation of approval processes.
- low error rate
- fully digital
- Transparency and compliance
- Cost Savings
- On-premises, SaaS
Frequently asked questions (FAQ) about the e-invoicing requirement in the German Federal Tax Authority (
)
The issuance of an e-invoice (in a B2B context) is not subject to the consent of the invoice recipient. All domestic business invoice recipients must be able to receive and process e-invoices from January 1, 2025. For invoices to end consumers (B2C), their consent remains a prerequisite for electronic invoicing.
Until now, the rule was that an invoice had to be human-readable. In the case of a hybrid format, the human-readable portion took precedence in case of doubt. With the new e-invoice requirement taking effect on January 1, 2025, the following applies: In the event of discrepancies, the“machine-readable portion”of the hybrid e-invoice format takesprecedenceover the human-readable portion.
All tax regulations applicable to conventional invoices in accordance with the Sales Tax Act (UstG) also apply to electronic invoices. The authenticity of the origin, the integrity of the content, and the legibility of the invoice must be guaranteed. The Federal Ministry of Finance's tax administration has not specified any specific audit obligations or control measures for corresponding audit procedures. However, it is recommended that the invoice sender and the invoice issuer introduce their own audit mechanisms to ensure that the content of both invoices is identical.
If one of the companies involved is not based in Germany or in one of the areas specified in Section 1 (3) of the German Value Added Tax Act (UStG), there is no obligation to issue an e-invoice. In this case, the invoice can continue to be issued on paper or as an e-invoice.
Ready to introduce e-billing?
WE ARE HAPPY TO ADVISE YOU!
Would you like to introduce e-billing in your company? With our many years of experience, we are here to advise and assist you in completely digitizing and automating your billing process.
See for yourself how our innovative all-in-one solution for your e-invoice workflow with ISR Accounts Payable Flow can help you. If you have any questions or would like to learn more about our consulting services or software, please feel free to contact us!
Jens Brettschneider
Head of Business Unit
Application Management
jens.brettschneider@isr.de
+49(0)151 422 05 425