E-Invoicing Mandate 2025–2028: The Complete Guide for Businesses

With the Wachstumschancengesetz of March 27, 2024, Germany created the statutory basis for a comprehensive e-invoicing obligation in the B2B sector. What initially appears to be a technical formality is in reality one of the most consequential changes in German accounting since the introduction of VAT. This guide explains all aspects of the obligation: legal foundations, deadlines, permitted formats, exceptions, penalties, and a practical preparation plan.

What Is the E-Invoicing Mandate?

The e-invoicing mandate obliges domestic B2B invoice issuers in Germany to use exclusively structured electronic invoices (E-Rechnungen) that comply with the European standard EN 16931. It applies to taxable supplies between two taxable persons established domestically. The obligation encompasses both a receiving obligation (from 2025) and a sending obligation (from 2027/2028).

The Legal Basis: New § 14 UStG

The Wachstumschancengesetz fundamentally revised § 14 UStG. The most important changes:

• New definition of e-invoice (§ 14 para. 1 UStG): An e-invoice is an invoice issued, transmitted, and received in a structured electronic format that enables automatic and electronic processing; it must comply with the EN 16931 standard.
• Distinction from other invoices: PDFs, paper invoices, and invoices in other formats are now classified as sonstige Rechnungen – not e-invoices within the meaning of the law.
• No requirement for qualified electronic signature: An e-invoice does not require a digital signature if authenticity and integrity are ensured through the company's internal control procedure.

The Deadlines in Detail

January 1, 2025: Receiving Obligation for Everyone

From January 1, 2025, all businesses established in Germany – regardless of size and turnover – must be able to receive structured e-invoices from other businesses. The obligation applies to receiving both XRechnung and ZUGFeRD files. Other invoices (PDF, paper) may only be sent with the explicit consent of the recipient.

January 1, 2027: Sending Obligation for Large Businesses

From January 1, 2027, businesses with total turnover exceeding €800,000 in the previous year must issue e-invoices for all domestic B2B supplies. The €800,000 threshold refers to the company's total turnover (§ 19 para. 1 UStG), not just the B2B portion.

January 1, 2028: Universal Sending Obligation

From January 1, 2028, all remaining businesses – including small businesses, freelancers, and companies below the €800,000 threshold – must issue e-invoices for domestic B2B transactions. There is no further transition period.

Which Formats Are Permitted as E-Invoices?

Only formats that fully satisfy EN 16931 qualify as e-invoices within the meaning of § 14 UStG. In Germany these are:

• XRechnung (UBL or CII syntax): The German reference format, used in the public sector.
• ZUGFeRD from version 2.1 at profile EN 16931, XRECHNUNG, or EXTENDED: The hybrid PDF/XML format.
• Factur-X (French equivalent of ZUGFeRD, technically identical): Also permitted.
• Other EN 16931-compliant formats: Provided both parties agree and the format demonstrably satisfies EN 16931.

Who Is Affected?

The obligation applies to all supplies within the meaning of § 1 para. 1 no. 1 UStG that are carried out domestically, where both the supplier and the recipient are taxable persons established domestically. Specifically affected are:

• GmbH, AG, UG (limited liability), OHG, KG, GbR with registered office or establishment in Germany.
• Sole traders (registered in the commercial register) and other commercial sole proprietors.
• Freelancers (doctors, lawyers, tax advisors, architects, IT consultants, etc.) for B2B invoicing.
• Small businesses (§ 19 UStG): From 2028 also these – with the special feature that despite their tax exemption they must issue e-invoices.
• Foreign businesses with a domestic permanent establishment or fixed place of business, insofar as domestic B2B supplies are concerned.

Who Is NOT Affected?

• B2C transactions: Invoices to private individuals (non-businesses) are not subject to the obligation.
• Invoices below €250 (§ 33 UStDV / Kleinbetragsrechnung): These must meet small-amount invoice requirements but not the e-invoice format.
• Travel tickets (§ 34 UStDV): Rail and transport tickets are exempt from the e-invoicing obligation.
• Cross-border B2B supplies: Invoices to recipients in other EU countries or third countries are not subject to the German obligation.
• Tax-exempt supplies under § 4 no. 8 ff. UStG (e.g. financial services, medical treatments): Insofar as no invoice issuance obligation exists.

Transitional Provisions 2025–2027: What Exactly Is Permitted?

During the transition period until end of 2026 (for large businesses) or end of 2027 (for all others), the following rules apply for sending:

• Paper invoices: Can still be sent – if the recipient agrees.
• PDF invoices by email: Also still permitted – if the recipient agrees.
• EDI invoices (electronic data interchange): Remain permitted until end of 2027 for companies under €800,000 turnover if the EDI format satisfies the requirements of the old § 14 UStG.

Impact on Input VAT Deduction

One of the most significant practical consequences of the new regulation concerns input VAT deduction (§ 15 UStG). From the respective mandatory dates, only a proper e-invoice entitles the recipient to input VAT deduction – an other invoice (PDF, paper) sent without the recipient's consent no longer satisfies the requirements of § 14 UStG and can jeopardize input VAT recovery.

Technical Requirements for Receiving

The receiving obligation from January 2025 does not require specialized software as long as a suitable receiving channel is in place. Minimum requirements:

• An email address to which e-invoices can be sent, plus the technical ability to open and read XML files.
• For ZUGFeRD: A PDF viewer that correctly renders PDF/A-3 files is sufficient for human readability.
• Recommended for automated processing: Integration into accounting software (DATEV, SAP, Lexware, Sevdesk, etc.) or an e-invoice service provider.

Technical Requirements for Sending

For the sending obligation from 2027/2028 you need a solution that generates EN 16931-compliant XML files. Options:

• Accounting software with integrated XRechnung/ZUGFeRD export: DATEV, SAP, Lexware, Sage, Sevdesk, FastBill, etc.
• Specialized e-invoicing middleware: Converts existing invoice data into compliant formats.
• Web-based tools: Our XRechnung Generator creates compliant UBL XML files directly in the browser.
• API integration: For developers, services such as Zugferd-Online, Mustang, or Ecosio offer API endpoints for invoice generation.

GoBD Archiving: Obligations for E-Invoices

Regardless of format, all invoices must be retained for 10 years in a GoBD-compliant manner. For e-invoices this means: the original document in its original format (XML for XRechnung, PDF/A-3 with embedded XML for ZUGFeRD) must be stored immutably. Simply printing or converting to PDF violates the GoBD requirement of original fidelity.

Sanctions for Violations

The VAT Act does not provide for direct fines for issuing an other invoice instead of an e-invoice. However, the indirect consequences are significant:

• Denial of input VAT deduction: The recipient can refuse input VAT on a non-compliant invoice – with significant liquidity consequences.
• Delayed payment: Automated accounts payable systems of large companies will from 2027/2028 only accept e-invoices.
• Contractual penalties: Framework agreements with major customers may provide for penalties for non-compliant invoices.
• Additional tax assessments: During a tax audit, missing e-invoices can be treated by the tax authority as evidence of formal bookkeeping deficiencies.

10-Point Preparation Plan for Businesses

1. Inventory: Identify all invoice relationships – who invoices you, whom do you invoice?
2. Check receiving infrastructure: Can your current software receive and process XRechnung and ZUGFeRD?
3. Check sending capability: Can your accounting software generate EN 16931-compliant e-invoices?
4. Ask your software vendor: When will XRechnung/ZUGFeRD export be available in your software?
5. Inform suppliers: Communicate your e-invoice receiving address to suppliers (email or Peppol ID).
6. Inform customers: Ask major customers if and when they will require e-invoices.
7. Ensure GoBD archiving: Set up revision-safe archiving for XML files.
8. Clean up master data: Check VAT IDs, bank details, and address data in your software.
9. Start test operations: Create test exports and validate them with our XRechnung Viewer.
10. Training: Train accounting and invoicing staff on the new requirements.

Frequently Asked Questions on the E-Invoicing Mandate

Does the obligation also apply to small businesses (§ 19 UStG)?

Yes, from January 1, 2028. Small businesses are VAT-exempt, but the invoice issuance obligation under § 14 UStG applies in principle to all taxable persons for B2B supplies. Their e-invoice will contain tax category E (exempt) and a reference to § 19 UStG, but it must formally be an EN 16931-compliant e-invoice.

Does the recipient need to consent to the e-invoice?

No – this is a common confusion with old law. Under the old § 14 para. 1 UStG, the recipient's consent was required. Under the new law, no recipient consent is required for sending an e-invoice. Conversely: for sending an other invoice (PDF, paper) from the mandatory dates, recipient consent is required.

What happens if my customer cannot receive e-invoices?

Technically every recipient must be able to receive e-invoices from January 1, 2025 – that is their legal obligation. If a customer factually cannot receive e-invoices, the compliance problem lies on their side. Nevertheless, a pragmatic solution is recommended: send a ZUGFeRD file in parallel (which is simultaneously a readable PDF) and clarify the technical situation with the customer.