eInvoicing FAQ in Germany
Welcome to what is likely the most comprehensive FAQ on eInvoicing, XRechnung, ZUGFeRD, and the upcoming mandatory eInvoicing for B2B transactions in Germany.
Here you will find all the essential information on the introduction of electronic invoicing, structured around 30 typical questions that are likely on the minds of decision makers in management, IT, finance, controlling, accounting, and other relevant departments in mid-sized companies across Germany.
Sound familiar? You are not alone. Hundreds of thousands of professionals across more than four million German companies are currently facing the same challenges. Many were caught off guard by the recently introduced mandatory eInvoicing requirements for B2B transactions starting in 2025.
While not all legal requirements for receiving compliant electronic invoices must be fully implemented on January 1, 2025, the deadline is approaching fast. By 2028 at the latest, the transition will be complete, and traditional invoice formats such as paper or PDF via email will no longer be permitted.
Sounds like a digital disruption? Read on to discover why the reality is far more manageable and how you can turn this regulatory pressure into an opportunity to save time, reduce costs, and streamline your processes.
General eInvoicing Questions
What exactly is an eInvoice and how does it differ from a traditional invoice?
An eInvoice (also referred to as an electronic invoice or e-invoice) is an invoice that is issued, transmitted, and received in a structured electronic format.
Unlike traditional paper invoices or PDF invoices, this structured format enables automated and electronic processing.
In Germany and across the European Union, electronic invoice formats must also meet specific semantic and structural requirements. In practical terms, this means they must comply with the European standard EN 16931.
In Germany, the two main standards are XRechnung, which was introduced several years ago for electronic invoicing in the public sector, and ZUGFeRD, an acronym for Central User Guide of the Forum for Electronic Invoicing Germany, starting from version 2.0.1 or higher.
When does the eInvoicing obligation apply to my company?
The obligation to implement eInvoicing will be introduced in phases starting January 1, 2025. The exact point at which your company is affected depends on various factors, such as company size and the nature of your business activities.
In practical terms, the mandatory introduction of electronic invoicing for B2B transactions in Germany follows a phased approach:
- Mandatory receipt 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 includes formats such as XRechnung and ZUGFeRD 2.0.1 or higher, as well as corresponding international formats such as Factur-X in France or FatturaPA in Italy. - Transition phase until the end of 2026:
During this phase, companies may still use paper invoices and other electronic formats such as PDF. However, the use of non-structured electronic formats requires the recipient’s consent. Companies are encouraged to prioritize structured electronic invoices. - Mandatory issuance from 2027:
From January 1, 2027, companies with an annual turnover exceeding 800,000 euros in the previous year must issue electronic invoices. For companies below this threshold, the obligation applies from January 1, 2028. Until then, other invoice formats may still be used. - Introduction of a digital VAT reporting system from 2028 or later:
A digital reporting system for invoice data is planned in Germany, expected from 2028. It is intended to support tax authorities in monitoring input VAT deductions and reducing the VAT gap. This system will be based on EU-wide requirements under the ViDA initiative and will apply to both domestic and cross-border transactions.
The phased implementation is designed to give companies sufficient time to adapt their systems and processes to meet the new legal requirements. The objectives include reducing VAT fraud, lowering administrative costs, and accelerating the digitalization of business processes.
What legal requirements must an electronic invoice meet?
A “true” electronic invoice must meet specific minimum requirements in order to be legally compliant. These requirements relate to both the content and the format of the invoice.
Content requirements
An electronic invoice must include the same ten mandatory data elements as a traditional paper invoice under Section 14 (4) of the German VAT Act (UStG). These include:
- Full name and full address of the supplier and the recipient
- Tax number or VAT identification number of the supplier
- Invoice issue date
- Unique and sequential invoice number
- Quantity and type of goods supplied or the nature and scope of the services
- Date of supply or service, or date of payment if this is known and differs from the invoice date
- Net amount for the supply or service, broken down by tax rates and exemptions
- Applicable tax rate and VAT amount, or a reference to a tax exemption
- Agreed reductions in price such as discounts or rebates, if not already included in the amount
- Indication “credit note” if the invoice is issued by the recipient
Format requirements
An electronic invoice must be in a structured electronic format that enables automated processing. Common and accepted formats in Germany include:
- XRechnung, an XML-based format developed by the Coordination Office for IT Standards (KoSIT)
- ZUGFeRD 2.0, a hybrid format combining a PDF/A-3 file with an embedded XML dataset
Technical requirements
- Authenticity of origin and integrity of content must be ensured. This means the issuer must be identifiable and the invoice content must not be altered after issuance. This can be achieved through electronic signatures, EDI procedures, or internal control processes.
- The invoice must also be machine-readable, which is ensured through the structured data format based on standardized EU specifications.
Archiving requirements
- Electronic invoices must be stored for a period of ten years. Archiving must be audit compliant, meaning that invoices must remain unchanged, complete, and readable throughout the entire retention period. The specific requirements are defined by the GoBD.
Additional legal aspects
- Until the end of 2026, recipients must consent to receiving electronic invoices if they are not compliant with EN 16931. From 2027 onwards, this consent requirement no longer applies.
Are there any exceptions to the eInvoicing obligation?
Yes, there are certain exceptions, for example for small businesses or in cases where the use of electronic invoices is technically or economically unreasonable.
The exact exceptions, such as transport tickets or low value invoices, are outlined here.
What are the consequences of non-compliance with the eInvoicing obligation from 2025, 2026, 2027, or 2028 onwards?
Non-compliance with the eInvoicing obligation may result in fines. It may also lead to payment delays and further legal consequences. However, the exact enforcement and penalties are not yet fully defined.
Technical Questions on the Electronic Exchange of XRechnung, ZUGFeRD and Other Formats
What technical requirements must our IT system meet in order to create and receive XRechnung, ZUGFeRD, or other approved invoice formats?
Your IT system must be capable of processing structured data formats such as XRechnung and transmitting them securely. This requires appropriate software solutions and, where necessary, adjustments to existing systems.
The transition is significantly easier with the support of an external service provider, often referred to as an eInvoicing provider. Such a provider ensures that the receipt of all EU-compliant electronic invoice formats, including those from international partners, works smoothly.
It also enables the reliable sending of invoices to national, European, and global business partners.
What software solutions are available for creating and managing eInvoices?
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 industry-specific applications.
However, it is difficult to predict whether the large number of these solutions will be fully ready for eInvoicing by the deadline of January 1, 2025.
Specialized eInvoicing providers, such as the experienced providers within the TRAFFIQX network, can support this transition. This can be done either through direct integration with your existing ERP system or via dedicated API interfaces that enable software vendors to quickly make their solutions ready for electronic invoice exchange.
How do we integrate the receipt and sending of electronic invoices into our existing IT infrastructure?
The integration of electronic invoice receipt and issuance requires careful planning and, in many cases, the support of IT experts. The selected solution should be compatible with your existing systems and integrate seamlessly into your business processes.
What security measures must we implement to ensure the integrity and confidentiality of eInvoices?
Security measures include the use of secure transmission channels, encryption technologies, and, where applicable, electronic signatures. It is essential to ensure the integrity and confidentiality of data throughout the entire process.
How are eInvoices archived and which storage formats are permitted?
Electronic invoices must be archived in a structured, machine-readable format that remains accessible and readable throughout the entire retention period.
The specific requirements are defined by the GoBD (Principles for the Proper Keeping and Storage of Books, Records and Documents in Electronic Form and for Data Access).
Process and Workflow Questions for Invoice Issuers and Recipients
How will our internal invoicing processes change with the introduction of eInvoicing?
The introduction of electronic invoice exchange, or at least electronic invoice receipt, requires adjustments to internal processes, including invoice creation, validation, and approval.
Automation and electronic workflows become increasingly important to improve efficiency.
Not sure where or how to start? Get in touch with us!
How do we train our employees to work with eInvoices?
Training your employees is critical for a successful transition to electronic invoice receipt, and where applicable, electronic invoice issuance.
This can be achieved through internal workshops, training provided by software vendors, or external training programs.
Alternatively, you can rely on the proven success management approach within the TRAFFIQX® Network.
What changes need to be made to our invoice approval process?
The invoice approval process may need to be digitalized and automated in order to meet the requirements of eInvoicing. This can include the use of workflow management tools and electronic signatures.
Our recommendation: To fully leverage the benefits of digital transformation, it may be worthwhile to involve an external consulting partner. Alternatively, you can rely on the expertise of one of the largest eInvoicing networks in Europe. We are happy to support you!
How is eInvoicing integrated into our ERP system?
The integration of electronic invoice exchange into your ERP system is achieved by implementing appropriate interfaces and plugins that enable seamless data exchange.
Support from your ERP provider or an experienced eInvoicing provider is often highly beneficial in this process.
For example, we have developed our own eInvoicing interface that ensures smooth and reliable invoice exchange via the TRAFFIQX Network.
What steps are required to transition to eInvoicing?
The necessary steps include selecting and implementing the right software or interface, adapting internal processes, training relevant employees in accounting, controlling, procurement, and related functions, and ensuring compliance with legal requirements.
Financial and Tax Questions on eInvoicing in Germany
What tax requirements apply to eInvoices?
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 ensuring proper archiving.
Find out more here.
How is compliance with tax regulations for eInvoices verified?
Compliance with tax regulations should be ensured through internal controls. It is important to meet all legal requirements in order to avoid potential legal issues.
In this context, dedicated and automated solution components for content validation, such as validators, and for visualization, such as viewers, are particularly valuable when processing incoming electronic invoice data.
What costs are associated with transitioning to eInvoicing?
The costs of transitioning can vary and typically include software acquisition, training, IT adjustments, and potential consulting fees.
Alternatively, companies may choose a cost-efficient volume-based model. This approach not only reduces initial implementation costs, but also lowers the ongoing effort required to maintain compliance with legal and technical requirements, as these are largely handled by the provider.
Are there any tax benefits or funding opportunities for implementing eInvoicing?
There are various funding opportunities and programs that can support companies in their digital transformation. Information on specific funding programs can be obtained from the relevant authorities, often at federal, state, or even local level.
How do we verify the authenticity and integrity of a received eInvoice?
The authenticity and integrity of a digitally received invoice can be verified through the use of electronic signatures and validation tools. This is essential to ensure compliance with legal requirements.
Supplier and Customer Relationships
Do our suppliers and customers also need to use eInvoices?
Your suppliers and customers will also be required to use eInvoices by 2028 at the latest.
Please note that this requirement may apply much earlier, especially if they work with public sector clients. In such cases, specific platforms such as the federal ZRE, OZG-RE, various regional platforms, or other dedicated transmission channels may already be mandatory.
How do we inform our suppliers and customers about the transition to eInvoicing?
Clear communication about upcoming changes is essential. This can be achieved through information materials, meetings, and training sessions to ensure that all stakeholders are prepared.
Alternatively, you can rely on the proven success management approach of one of the largest eInvoicing networks in Europe.
What should we do if a supplier or customer is not ready to use eInvoices?
In such cases, you should engage in dialogue and clearly communicate the benefits of eInvoicing. Where necessary, interim solutions can be established until all parties have completed the transition. However, it should also be made clear that by 2028 at the latest, there will be no alternative to eInvoicing.
By the way, companies that approach the digital transformation of their invoicing processes with one of the experienced TRAFFIQX® providers also benefit from extensive expertise in supplier onboarding. With proven onboarding processes and a unique customer success management approach, you are supported throughout the entire transition.
Which eInvoice formats are accepted by our business partners?
Accepted formats may vary. The most common formats in Germany include XRechnung and ZUGFeRD.
It is important to align with your business partners to identify compatible formats and avoid unnecessary redundancies.
How do we ensure that our eInvoices are accepted by our international business partners?
International business partners should be included in the transition process and informed about specific requirements. It is important that eInvoices comply with international standards.
In Europe, the harmonization process is simplified by the common EU standard EN 16931. However, in practice, the complexity often lies in the pan-European format details.
Legal, Regulatory, and Compliance Questions
What legal requirements apply to an optional electronic signature?
Electronic signatures must comply with the requirements of the eIDAS Regulation. This regulation governs electronic identification and trust services for electronic transactions within the European Union.
How do we ensure that our electronic invoices comply with data protection regulations?
Data protection must be ensured through appropriate technical and organizational measures. This includes secure data storage and transmission, as well as compliance with the General Data Protection Regulation.
What retention periods apply to digital invoices?
Electronic invoices are subject to the same retention periods as traditional invoices. In Germany, the retention period is generally ten years.
The specific requirements are defined by the GoBD (Principles for the Proper Keeping and Storage of Books, Records and Documents in Electronic Form and for Data Access).
Please note that under the planned Fourth Bureaucracy Reduction Act, the retention period may be reduced to eight years. However, this legislation is still in draft status.
By the way, companies that approach the digital transformation of their invoicing processes with one of the experienced TRAFFIQX® providers also benefit from extensive expertise in supplier onboarding. With proven onboarding processes and a unique customer success management approach, you are supported throughout the entire transition.
What documentation requirements do we have in relation to eInvoices as an issuer or recipient?
All relevant information related to the creation, transmission, and archiving of eInvoices must be documented. This also includes evidence of compliance with legal requirements.
In practical terms, this means that a documented process description is required.
How do we handle invoices that cannot or should not be submitted as eInvoices?
For such cases, clear processes should be defined for how these invoices are handled. Where appropriate, these invoices can be converted into a structured electronic format to meet legal requirements.
However, after 2028, such scenarios are likely to remain relevant primarily in international, non-European invoicing contexts.