Germany is rolling out one of the most significant VAT digitalisation reforms in the EU. With the Growth Opportunities Act, the BMF has redefined what counts as an electronic invoice and set a transition period that ends in 2028.
From 1 January 2025, all companies must be able to receive structured e-invoices. Issuing obligations follow: 1 Jan 2027 (turnover >€800K) and 1 Jan 2028 (all others).
The BMF’s objective is to modernise the German economy and lay the foundation for near real‑time VAT reporting. From 1 January 2025, invoices must be issued in a structured electronic format so they can be processed automatically and supply data for a future reporting system.
The reform is linked to the EU’s upcoming VAT in the Digital Age (ViDA) initiative and is designed to reduce administrative burdens and close the VAT gap.
The legal basis is the Wachstumschancengesetz (Growth Opportunities Act) and guidance from the Federal Ministry of Finance (BMF), which define an electronic invoice (E‑Rechnung) as a document in the EN 16931 structure (XML/UBL) containing mandatory fields.
Acceptable formats include XRechnung and the hybrid ZUGFeRD 2.1+; simple PDFs no longer qualify.
The law does not provide a central government portal; instead, invoices are exchanged directly between trading partners or via service providers, reflecting the principle of technological neutrality.
The new rules apply to domestic B2B transactions and do not cover B2C sales or cross-border supplies.
Structured e-invoice becomes the default. Only invoices in a structured format compliant with EN 16931 qualify. Simple PDFs or image files count as "other invoices".
Every domestic business — including small businesses — must be able to receive and process e-invoices.
Businesses may still send paper or unstructured electronic invoices if the customer agrees.
If the issuer's turnover in 2026 does not exceed €800,000, paper or PDF invoices may continue until 31 December 2027.
Issuers with turnover above €800,000 must stop using paper/unstructured invoices. EDI systems not yet meeting EN 16931 may still be used until end 2027.
All domestic businesses must issue structured e-invoices for B2B transactions.
Exemptions: Small-invoice transactions (≤ €250) and tickets remain exempt. Small entrepreneurs may continue issuing paper invoices after 2028, but they still must accept e-invoices.
An e-invoice is valid only if its structured part conforms to the European standard EN 16931. The BMF identifies two national formats that meet this requirement:
Germany's XML-based syntax used in public procurement and now extended to B2B. Contains only structured data and requires a viewer for human readability.
Hybrid format combining structured XML with a PDF. The MINIMUM and BASIC-WL profiles do not qualify.
Other syntaxes listed in EN 16931 (e.g., UBL 2.1 or UN/CEFACT CII) may be agreed bilaterally, provided all mandatory VAT data can be extracted. EDI invoices are also acceptable if the parties ensure the data can be transformed into an EN 16931-compliant structure.
All mandatory invoice information must appear in the structured XML. It is not sufficient to place key details in an unstructured attachment; attachments may only contain supplementary information.
Germany has opted for a decentralised, post-audit model. Unlike clearance systems (e.g., in France or Greece), there is no central government platform that all invoices must pass through.
The BMF leaves the transmission method open, allowing businesses to exchange e-invoices via:
From 1 January 2025, all businesses must be able to receive e-invoices — a simple email inbox is sufficient. Even small businesses primarily issuing invoices to consumers are advised to enable receipt, because suppliers may start sending e-invoices.
The BMF recommends using validation tools to check both the technical syntax and business rules of e‑invoices before sending. In its October 2025 circular, three error categories were introduced:
The invoice file does not use one of the permitted syntaxes or is not machine‑readable. Such invoices are considered “other electronic invoices” and are invalid for VAT.
Missing mandatory elements or inconsistent data (e.g., missing buyer reference or mismatched totals). These are critical during validation.
Violations of §§ 14 or 14a UStG (e.g., wrong tax classification). Invoices with content errors are not properly issued.
The German government is evaluating how to support future e-Reporting. Three scenarios have been discussed:
Extending the existing OZG-RE portal (supports web, file upload, and Peppol channels)
Utilising the Konsens tax IT infrastructure
Building a national reporting system from scratch
The BMF emphasises that the platform must be neutral. Peppol cannot be the sole channel. B2B exchange will remain decentralised.
Identify where invoices are generated, transmitted and received. Document how each invoice type will be produced in structured form.
Ensure they can generate EN 16931-compliant XML (XRechnung, ZUGFeRD) and handle both structured and hybrid formats.
At minimum, create an email inbox dedicated to e-invoices and configure your systems to process XML attachments.
Decide whether to use the transitional period through 2026/2027. Larger businesses (> €800k turnover) should aim to switch to structured invoices by 2027.
Use tools that check syntax and business rules, and ensure that all mandatory fields are captured.
Educate finance and IT staff about the new definitions, permitted formats and retention requirements (8 years for e-invoices).
Invoice‑Portal offers a comprehensive solution for businesses facing Germany’s e‑invoice mandate — generating, validating, converting and archiving e‑invoices end‑to‑end.
By preparing early and adopting an end‑to‑end solution, companies can meet the 2025 receipt requirement, navigate the transition period and be ready for the full B2B e‑invoicing obligation by 2028.
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