Will (or should) the eInvoicing requirement for B2B be postponed?
Arguments for and against the introduction of B2B eInvoicing on January 1, 2025
An important decision is looming in Germany: Should the mandatory introduction of electronic invoicing in the B2B sector in accordance with the EN 16931 standard be postponed? This debate raises numerous questions, particularly for small and medium-sized enterprises (SMEs). In this blog post, we take a look at the main arguments from both sides.
What is mandatory eInvoicing all about?
The Growth Opportunities Act (WCG) in Germany aims to strengthen the country’s competitiveness and improve the economic situation of businesses. It was passed by the German Bundestag on November 17, 2023, with the votes of the governing parties, though the opposition voted unanimously against it. Since no agreement or compromise was reached in the Bundesrat and the federal budget was hanging in the balance, the bill was subsequently referred to the Mediation Committee.
The main objectives of the Growth Opportunities Act are:
- improving the liquidity situation of companies
- providing incentives for investment and innovation
This is intended to support the transformation of the economy and strengthen competitiveness and growth opportunities in Germany. The law includes various measures for small and medium-sized enterprises (SMEs), which are often affected by high income taxation.
Among the most important growth measures are:
- Investment premiums for climate-friendly investments
- Expanded tax incentives for research
- Expansion of the corporate tax option
- Increase in the actual taxation threshold
- Reform of tax deferral benefits
- Extension of loss carryback
- Suspension of minimum taxation
- Raising the limits for immediate write-off of low-value assets
A significant change provided for in the Growth Opportunities Act concerns the introduction of mandatory eInvoicing for domestic transactions, expected to take effect in 2025. This measure is intended to contribute to the simplification and digitization of invoicing and to increase efficiency.
However, the complete transition of the German economy to electronic invoicing (eInvoicing) within just a few years is now seen by many stakeholders as moving far too quickly—even though it would bring urgently needed additional revenue from value-added tax in the tens of billions of euros within reach for the struggling national budget.
But it’s true: Postponing the mandatory use of eInvoicing in the B2B sector in Germany can—depending on one’s perspective and (political) objectives—certainly have both advantages and disadvantages. The question is, which ones?
On the one hand, further extending the timeline would give small and medium-sized businesses, in particular, more time to prepare for the transition and adapt their systems accordingly. On the other hand, a significant delay of several months or even years could mean that the hoped-for efficiency gains and simplifications in invoicing would only be realized later—and Germany as a whole would once again fall further behind in the race for less bureaucracy, future viability, and attractiveness as a business location.
Nevertheless: It is important that companies carefully plan this transition and prepare for the upcoming changes.
The eInvoicing requirement for B2B in Germany: Arguments for a postponement!
- More time for SMEs: A postponement would give companies, especially SMEs, a longer timeframe to adapt to the new requirements. They could find adequate solutions and adjust their processes accordingly.
- IT Infrastructure and Political Disagreements: Due to ViDA and differences between the Bundestag and the Bundesrat, uncertainties in the IT infrastructure could arise. A postponement could prevent companies from facing additional burdens caused by these ambiguities.
- Adjustments Following Criticism: Earlier draft legislation deemed certain established processes, such as EDI, no longer permissible. However, adjustments were made following criticism from the business community. These discrepancies indicate that further clarification is needed, particularly regarding the national reporting system for combating VAT fraud.
Why It Is Better to Stick to the Schedule for Introducing The eInvoicing Requirement After All?
No additional time mandatory: Many argue that companies do not need more time, but rather access to reliable information (know-how) and solutions (do-how) to implement the e-invoicing requirement.
Avoiding media breaks: Starting January 1, 2025, invoice recipients must be able to accept an invoice electronically. This could lead to media breaks if companies continue to send paper invoices, which can result in duplicate processing.
Efficiency and cost savings: The early sending and readiness to receive eInvoicing can lead to significant savings, both in terms of personnel (through automated processing and verification), time, and costs (e.g., postage).
Preparing for future requirements: Through early implementation and planning, companies can avoid teething problems and complications that may arise with a last-minute rollout.
Strengthening customer and supplier loyalty: By using flexible solutions that support various formats, companies can better meet the needs of their customers and suppliers.
This results in… a difficult decision
The decision regarding a possible postponement of the Growth Opportunities Act is complex. While a delay would give SMEs and other businesses more time to adapt, proponents of prompt implementation argue that efficiency gains and cost savings are more important. Ultimately, a balanced decision must be made that takes into account both the needs of the economy and the mandatory nature of modern and efficient invoicing.
Regarding the potential impact of the law on the German government’s budget deficit, it should be noted that investment incentives and tax simplifications may lead to lower tax revenues in the short term. In the long term, however, a stronger economy could contribute to higher tax revenues and thus to a reduction in the budget deficit. This depends on various factors, including the effectiveness of measures to promote investment and innovation, how businesses respond to the tax incentives, and the general economic situation.
Accelerating the implementation of these measures could theoretically lead to faster investment and innovation in the German economy, which could potentially boost economic growth. Such growth could in turn increase tax revenues and thus help reduce the budget deficit.
Secure your consultation now!
Want to learn more? Schedule your free consultation with our expert Lars Becher, Key Account Manager and Subject Matter Expert for e-invoicing and CTC within the TRAFFIQX® network.
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Give him a call: +49 (0)6359 – 9 37 90
or drop him a line at: lars.becher@b4value.net