An eInvoice (often written as e-bill or referred to as eInvoice) is an invoice that is issued, transmitted, and received in a structured electronic format. Unlike a traditional paper invoice or PDF invoice, the structured format enables automatic and electronic processing. In Germany (and throughout the EU), these electronic invoice formats must also meet certain semantic and structural requirements in the future. Specifically, this means that they must comply with the specifications of the EU standard EN 16931. In Germany, there are two main standards: XRechnung (which was developed several years ago for the introduction of e-invoice receipt by the public sector) and ZUGFeRD (“an acronym for ”Zentraler User Guide des Forums elektronische Rechnung Deutschland" [Central User Guide of the German Electronic Invoice Forum]), the latter at least from version 2.0.1 onwards.

The obligation to use eInvoicing will come into effect gradually from January 1, 2025. The exact date on which your company will be affected depends on various factors, such as the size of the company and the type of business activity. Specifically, this means that the introduction of mandatory electronic invoicing (eInvoicing) for the B2B sector in Germany will take place in several phases:

1. Obligation to receive from January 1, 2025: From this date, all companies in Germany must be able to receive electronic invoices in accordance with the European standard EN 16931. This standard includes formats such as XRechnung and ZUGFeRD 2.0.1 or higher (and all corresponding foreign formats such as Factur-X from France, FatturaPA from Italy, etc.).
2. Transition phase until the end of 2026: During this phase, companies can continue to use paper invoices and other electronic formats such as PDF, but the latter only with the consent of the recipient. However, companies should preferably issue and receive e-invoices.
3. Mandatory issuance from 2027: From January 1, 2027, all companies with a previous year's turnover of more than €800,000 must issue electronic invoices. For companies with a lower turnover, this obligation will apply from January 1, 2028. Until then, they may continue to use other invoice formats.
4. Introduction of an electronic VAT reporting system from 2028 (or later): A digital reporting system for invoices, which is planned in Germany after 2028, is intended to support the tax authorities in controlling input tax deductions and reducing the VAT gap. This system will be based on EU-wide requirements (ViDA) and will be relevant for both domestic and cross-border transactions.

The gradual introduction is intended to give companies sufficient time to adapt their systems and processes to meet the new legal requirements. In addition to combating VAT fraud, the objectives are to reduce administrative costs and promote the digitization of business processes.

A “genuine” electronic invoice must meet certain minimum requirements in order to be legally compliant. These requirements relate to both the content and format of the invoices. The most important requirements include:

Content requirements

An electronic invoice must contain the same 10 minimum mandatory details as a conventional paper invoice, in accordance with Section 14 (4) of the German Value Added Tax Act (UStG). These include:

1. Full name and full address of the supplier and the recipient of the service.
2. Tax number or VAT identification number of the supplier.
3. Date of issue of the invoice.
4. Sequential invoice number, which is assigned uniquely.
5. Quantity and type of products delivered or the type and scope of other services.
6. Date of delivery or other service or the date on which the payment was received, if this date is known and is not the same as the date of issue.
7. Payment (net amount) for the delivery or other service, broken down by tax rates and individual tax exemptions.
8. Applicable tax rate and the tax amount (sales tax) applicable to the payment, or a reference to a tax exemption.
9. Pre-agreed payment reductions, such as rebates, bonuses, or discounts, unless these are already included in the payment.
10. Credit note (if the invoice is issued by the recipient of the service, the reference “credit note” is required).

Format requirements

An electronic invoice must be in a structured electronic format that enables automated and electronic processing. The following are common and permissible in Germany:

• XRechnung: An XML-based format developed by the German Coordination Office for IT Standards (KoSIT).
• ZUGFeRD 2.0: A hybrid format that contains both a PDF/A-3 file and an embedded XML data record.

Technical requirements

• Authenticity of origin and integrity of content: The invoice must ensure that the issuer of the invoice can be identified and that the content has not been altered since it was issued. This can be ensured by electronic signatures, EDI (Electronic Data Interchange) procedures, or internal control procedures.
• Legibility: The electronic invoice must be machine-readable, which is achieved by the structured data record in accordance with uniform EU specifications.

Archiving

• Electronic archiving: Electronic invoices must be stored for the prescribed period of ten years. Archiving must be audit-proof, i.e., the invoices must remain unchanged, complete, and readable at all times throughout the entire storage period. More detailed rules are set out in the GoBD (Principles for the proper management and storage of books, records, and documents in electronic form and for data access).

Further legal aspects

• Consent of the recipient: Until the end of 2026, the recipient must consent to electronic invoices if they are not EN 16931-compliant digital documents. From 2027, this consent requirement will no longer apply.

Yes, there are certain exceptions, for example for small businesses or in cases where such a digital invoice is technically or economically unreasonable. The exact exceptions (e.g., tickets, micro-amount invoices, etc.) can be found here.

Fines may be imposed for non-compliance with the eInvoicing requirement. In addition, there may be delays in payments and further legal consequences. However, this is not (yet) certain.

Your IT system must be capable of processing structured data formats such as XRechnung and transmitting them securely. This requires appropriate software solutions and, if necessary, adjustments to existing systems. The transition is particularly easy with the support of an external service provider (a so-called eInvoicing provider). This is because they not only ensure that all EU-compliant eInvoice formats (including those from abroad) are received smoothly, but also that they can be sent to national, European, and global business partners without any problems.

For smaller invoice volumes of a few dozen to a few hundred incoming and outgoing invoices per month, there are already various software solutions available today, such as DATEV Unternehmen online or various industry-specific software solutions. However, it is difficult to predict whether the large number of the latter will be completely ready for eInvoicing by the deadline of January 1, 2025. Specialized eInvoicing providers such as the experienced providers in the TRAFFIQX® network can also help here—either directly with your company's individual ERP system or in the form of a special API interface that allows affected software providers to make their entire product ready for electronic invoice exchange in no time at all.

The integration of electronic invoice receipt and dispatch requires careful planning and possibly the support of IT experts. Your preferred solution should be compatible with your existing systems and can be smoothly integrated into your business processes.

Security measures include the use of secure transmission channels, encryption technologies, and, where appropriate, electronic signatures. It is important that the integrity and confidentiality of the data are guaranteed throughout the entire process.

Electronic invoices must be archived in a structured, machine-readable format that remains legible throughout the entire retention period. More detailed rules are set out in the GoBD (Principles for the proper management and storage of books, records, and documents in electronic form and for data access).

The introduction of electronic invoice exchange (or at least electronic invoice receipt) requires internal processes to be adapted, including invoicing, verification, and approval. Automation and electronic workflows are becoming increasingly important for boosting efficiency. Not sure how or where to start? Get in touch with us!

Training your own employees is crucial for a successful transition to electronic invoice receipt (and, if applicable, dispatch). This can be done through internal workshops, training courses provided by software providers, or external training programs. Or you can rely on the proven success management of the TRAFFIQX® network!

The invoice approval process may need to be digitized and automated in order to meet eInvoicing requirements. This may involve the use of workflow management tools and electronic signatures. Our tip: To get the most out of the digital transition, it may be worthwhile to consult an external service provider. Or you can rely on the expertise of one of Europe's largest eInvoicing networks. We would be happy to advise you!

Electronic invoice exchange is integrated into your ERP system by implementing appropriate interfaces and plugins that enable smooth data exchange. Support from your ERP provider or an experienced eInvoicing provider is often very helpful in this regard. For example, we have developed our own e-invoicing interface that ensures access to smooth invoice exchange via the TRAFFIQX network.

The necessary steps include selecting and implementing the right software or suitable interface, adapting internal processes, training the relevant employees in accounting, controlling, purchasing, etc., and ensuring compliance with legal requirements.

Electronic invoices must meet the same tax requirements as traditional invoices. This includes providing all relevant information such as tax rates and tax amounts, as well as proper archiving. You can find out more about this here.

Compliance with tax regulations should be ensured through internal controls. It is important that all legal requirements are met in order to avoid legal problems. In this context, dedicated and automated solution components for content checking (validators) and visualization (viewers) of incoming electronic invoice data records are particularly worthwhile.

The costs of the changeover can vary and include the purchase of software, training, IT adjustments, and possible consulting costs. Or you can opt for a particularly cost-efficient volume model right away. This will save you money not only in terms of initial implementation costs. The necessary expenses for operation that is always compliant with laws and regulations and state-of-the-art technology are also significantly lower with such a provider solution.

There are various funding opportunities and programs that can support companies with digitalization. Information on specific funding programs is available from the relevant authorities—often at the state or even municipal level.

The authenticity and integrity of a digitally received invoice can be verified using electronic signatures and validation tools. This is important in order to comply with legal requirements.

Your suppliers and customers must also use e-invoices by 2028 at the latest. Please note: This applies in particular if you work with public contractors (for whom there are specific invoicing platforms such as the federal government's ZRE, the OZG-RE, numerous other state solutions, and other, even more individual transmission channels) or exceed certain sales thresholds, possibly even much earlier or already now.

Clear communication about the upcoming changes is important. This can be done through information letters, meetings, and training sessions to ensure that everyone involved is prepared. Or you can rely on the excellent success management of one of Europe's largest eInvoicing networks.

In such cases, you should seek dialogue and explain the advantages of eInvoicing. If necessary, transitional solutions can be found until all parties involved have completed the changeover. If necessary, however, point out that there will be no way around it by 2028 at the latest.

By the way: If you tackle the digital conversion of your own invoicing processes with one of the experienced TRAFFIQX® providers, you will also benefit from the many years of experience of one of Europe's largest eInvoicing networks when it comes to “convincing suppliers.” With our proven and demonstrably successful onboarding processes and unique customer success management, we won't let you down here either.

The accepted formats may vary. The most common formats in Germany include XRechnung and ZUGFeRD. It is important to coordinate with business partners to identify compatible formats and avoid unnecessary redundancies.

International business partners should be involved in the transition process and informed about the specific requirements. It is important that eInvoices comply with international standards. In Europe, the generally binding EU standard EN 16931 simplifies this harmonization and coordination process. However, the “digital devil” often lies in the pan-European format details.

Electronic signatures must comply with the requirements of the eIDAS Regulation. This regulation governs electronic identification and trust services for electronic transactions in the EU.

Data protection must be ensured through appropriate technical and organizational measures. This includes the secure storage and transmission of data as well as compliance with the General Data Protection Regulation (GDPR).

eInvoices are subject to the same retention periods as conventional invoices. In Germany, the retention period is generally ten years. More detailed provisions are set out in the GoBD (Principles for the proper management and storage of books, records, and documents in electronic form and for data access). Note: As part of the planned 4th Bureaucracy Relief Act (BEG-IV), this retention period is to be reduced to eight years. However, the law is still in draft form.

All relevant information relating to the creation, transmission, and archiving of eInvoices must be documented. This also includes evidence of compliance with legal requirements. In other words, you need procedural documentation.

Clear processes should be defined for handling such invoices. If necessary, these invoices can be converted into electronic format to comply with legal requirements. However, this scenario is more likely to play a role in international, non-European invoicing after 2028.