Germany’s Mandatory B2B E-Invoicing: What Your Business Needs to Know

Starting January 1, 2025, Germany is making e-invoicing mandatory for B2B transactions, aligning with the EU’s push toward digitized business processes. This new regulation focuses on receiving inbound invoices, unlike some countries that mandate both sending and receiving.

This significant change applies to all taxpayers engaged in B2B transactions, without any threshold limits. Is your business ready? Here’s everything you need to know, including technical requirements, best practices, and steps to ensure compliance.

The new regulation means businesses must:

• Receive e-invoices in compliant formats like XRechnung or ZUGFeRD 2.1 or higher.
• Archive invoices securely to meet German tax laws.

• A German e-invoicing standard designed for compliance with the EU Directive 2014/55/EU on public procurement.
• Widely used in business-to-government (B2G) transactions since November 2020.
• Ensures structured data exchange, making it ideal for automating invoicing processes.

• A hybrid e-invoicing format that combines a human-readable PDF document with embedded structured XML data to allow manual and automated invoice processing.

• PEPPOL Access Points: Receiving e-invoices through the PEPPOL Network is efficient and secure.
• API Gateways: Direct integrations with ERP or accounting systems for seamless data transfer.
• Email with XML Attachments: Create a dedicated email address for receiving e-invoices. Notify your vendors of this address and request them to send their invoices here.
• AS4 Protocol:A robust, secure protocol designed for high-volume document exchange.

German tax law requires all e-invoices to be archived for at least 10 years. Your archiving system must ensure:

• AS4 PReadability: Keeping invoices accessible for audits.
• Authenticity: Verifying the invoice’s origin.
• Integrity: Preventing unauthorized modifications.
• Validate the XML data against the invoice layout.

While Germany’s e-invoicing formats, XRechnung and ZUGFeRD, do not mandate digital signatures, businesses should check for discrepancies to ensure data accuracy and compliance.

• Enable Invoice Reception: Ensure systems accept e-invoices in compliant formats like XRechnung or ZUGFeRD.
• Implement Archiving Solutions: Ensure systems accept e-invoices in compliant formats like XRechnung or ZUGFeRD and set up a secure, compliant archiving system to store invoices for the mandatory 10-year retention period.

• Automated Data Matching: Develop a system to cross-check invoice layouts with the received XML data for accuracy. Partner with e-invoicing service providers to simplify the process.
• Centralized Invoice Collection: Consolidate invoice layouts from various sources (e.g., email, ERP integrations, SFTP)—Automate workflows to deliver invoices directly to the accounting team for faster payment processing.

Need assistance with implementing Germany’s e-invoicing mandate?

The e-Vatguy team is here to guide you. Contact our team to Streamline your invoice handling to save time, reduce errors, and build a tailored system that aligns with your business processes.