E-invoicing in Germany: What needs to be done by 1 January 2027

The e-invoicing requirement has been in force since 1 January 2025: all businesses established in Germany must be able to receive e-invoices. The transitional rules for issuing invoices, however, are being phased out. The next important deadline is 1 January 2027 – now is the time to review your processes instead of relying on an email inbox and assuming that is enough.

Many companies have already set up an email inbox for receiving invoices. On its own, however, this is generally not enough to ensure legally compliant implementation. What matters is that incoming e-invoices can also be read, checked, approved, posted and retained in their original structured format.

 

Key deadlines

• Until 31 December 2026: all invoice issuers may still use other types of invoice – paper invoices without the recipient’s consent, and simple electronic invoices (e.g. a PDF by email) only with the recipient’s consent.
• Until 31 December 2027: only businesses with prior-year turnover of no more than EUR 800,000 may continue to use the transitional rule. The same applies to EDI processes that do not meet the requirements for an e-invoice.
• From 2028: an e-invoice must generally be used for transactions between businesses established in Germany, unless an exception applies.

 

A business whose turnover exceeded EUR 800,000 in 2026 should therefore be able to issue e-invoices from 1 January 2027 – not only from 2028.

 

What qualifies as an e-invoice?

Under section 14(1), sentence 3 of the German VAT Act (UStG), an e-invoice is an invoice in a structured electronic format that enables electronic processing – for example XRechnung (pure XML) or ZUGFeRD from version 2.0.1 onwards (except for the MINIMUM and BASIC-WL profiles). A PDF sent by email does not meet this requirement and remains an ‘other invoice’ within the meaning of sentence 4 of the same provision. With ZUGFeRD, the structured XML component is decisive in case of doubt, not the readable PDF image. If the two differ, the divergent image component may additionally be treated as a separate other invoice and create a risk under section 14c UStG.

Because an XRechnung is a pure XML file and cannot be read by the human eye, the recipient needs a viewer solution or a corresponding visualisation function in its ERP system. Without this technical capability, the incoming invoice cannot be reviewed in practice.

 

Exactly when must an e-invoice be issued?

A simple sequence of questions helps when assessing an individual case: Is the transaction a taxable supply of goods or services? Is the recipient a business acting in that capacity? Are both parties established in Germany? Does no exception apply? And is a transitional rule still available? An e-invoice is mandatory only if all of these conditions are met.

An important point: it does not matter who is liable for the tax. Reverse-charge cases under section 13b UStG – for example construction services or sales of scrap and precious metals – as well as differential taxation under section 25a UStG and margin taxation for travel services under section 25 UStG are also covered by the requirement once the other conditions are met.

 

Exceptions to the requirement

The following do not require an e-invoice: invoices to private individuals, low-value invoices up to EUR 250 (section 33 of the German VAT Implementing Regulation, UStDV), passenger tickets (section 34 UStDV), and small businesses within the meaning of section 19 UStG. Small businesses must nevertheless be able to receive e-invoices. A voluntary e-invoice remains possible in all of these cases.

In practice, cash transactions in particular often exceed the EUR 250 threshold without anyone noticing – for example hotel stays, refuelling construction machinery, or larger purchases from DIY stores or wholesalers. It is worth defining a small, dedicated process: Who requests an e-invoice in these cases, who checks it, and who archives it?

 

Common practical pitfalls

• Continuing obligations (rent, leasing, maintenance): a single e-invoice for the first partial performance period will often suffice if the underlying contract is attached or the invoice clearly indicates that it is a recurring invoice. If mandatory information changes, such as the amount charged, a new invoice may nevertheless be required.
• Advance-payment and final invoices: these are technically more difficult to map in many software solutions than standard invoices and should be tested separately at an early stage.
• Invoice corrections: if the original invoice had to be issued as an e-invoice, the correction must also be issued as an e-invoice. Changes to the taxable amount under section 17 UStG, such as a cash discount, do not in themselves require a corrected invoice.
• Archiving: the structured component must be retained unchanged in its original format. For hybrid formats, the business must document which components are stored and how they can subsequently be made readable again. The GoBD requirements concerning traceability, immutability and machine readability continue to apply without change.
• Interfaces: in practice, problems arise less often when creating the invoice itself than at the interfaces between the email inbox, document management, ERP, payment approval and archiving. It is worth establishing which system is ultimately the authoritative data source for the VAT return.

 

Our recommended approach

• Clarify responsibility: appoint one person or department to coordinate the transition from both a technical and functional perspective
• Identify affected outgoing invoices, particularly continuing obligations, advance payments, credit notes and cash transactions above EUR 250
• Check prior-year turnover: is it above or below EUR 800,000?
• Define the channel for receiving incoming e-invoices and assign responsibility for checking and approval
• Test accounting and ERP software for XRechnung and ZUGFeRD – including validation, visualisation and archiving, not just sending invoices
• Update customer and supplier master data (business status, VAT identification number, billing address, preferred format)
• Carry out test runs with key customers and suppliers, including special cases such as corrections and cancellations
• Train staff and update the procedural documentation accordingly

 

The later the transition begins, the more important a pragmatic approach becomes: receipt, checking, posting and archiving should work reliably first. Automation and interface optimisation can then be expanded.

We would be pleased to help you adapt your processes to the new requirements in good time. Please contact us if you have any questions.

 

Sources: sections 14, 14a, 14c, 17, 19, 25 and 25a UStG, as amended by the Growth Opportunities Act (Wachstumschancengesetz) of 27 March 2024; sections 33 and 34 UStDV; Federal Ministry of Finance (BMF) letter dated 15 October 2024.