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David Bochmann
Current developments in e-invoicing
The receipt of electronic invoices (e-invoices) will be mandatory in the B2B sector from 2025!
As part of the EU initiative “VAT in the Digital Age (ViDA)” and the German draft bill for the “Growth Opportunities Act” of July 14, 2023, the introduction of e-invoicing for domestic B2B sales has already been prepared. On March 22, 2024, the Federal Council approved the introduction of mandatory e-invoicing as part of the Growth Opportunities Act.
If you do not create paper invoices, you probably already send your invoices digitally, for example as a PDF. This is already a streamlined process compared to paper handling. In most cases, however, even digital PDF invoices are not optimally readable by the machine. To ensure that invoices are now standardized and machine-readable, e-invoicing will become mandatory in the B2B sector.
E-invoicing is also intended to help curb VAT fraud and improve processes in companies. There are also plans to introduce an electronic reporting system at a later date, which will be able to forward invoice data to the tax authorities.
Form and type of invoice
Paper invoice
The traditional paper invoice format does not allow automatic electronic processing. Even if the invoice information is digitized, for example through scans or digital photos, the data is not structured. They must therefore be transferred to the accounting software either manually or via additional systems, such as Optical Character Recognition (OCR) recognition. This results in many media disruptions and no streamlined processes.
Digital invoice and PDF invoice
Although a PDF invoice is issued, transmitted and received electronically, it is a digital invoice with an often pictorial representation that does not enable automatic electronic processing. For further electronic processing, the data must be transferred to the accounting software manually or with the help of additional systems such as Optical Character Recognition (OCR). Other formats such as “.tif”, “.jpeg” and “.docx” also only allow an image-based representation of the invoice content and do not meet the requirements of an electronic invoice.
E-invoice
The decisive difference between a scanned paper or PDF invoice and an e-invoice is that the latter is available in a structured format in accordance with the EU standard, is transmitted or received electronically and enables automatic and electronic processing without media disruptions.
An e-invoice is designed as a purely semantic data format, which enables direct integration of the invoice data into the processing systems.
The structured form of the e-invoice is based on an XML format, which enables machine processing. Visualization programs can be used to make the rather cryptic XML files readable for humans.
There are two different formats:
- ZUGFeRD 2.0 is a hybrid data format that contains the visualization document and the embedded structured XML for further electronic processing in one format. (PDF + XML)
- XRechnung is a data exchange standard for electronic invoices, which is used as a standard in B2G. (XML only)
Who has to create or receive e-invoices?
E-invoices are already mandatory for all suppliers or contractors working for public clients. From 01.01.2025, the e-invoice standard will also be mandatory for the B2B sector. It is therefore advisable for companies to check today whether their invoicing software supports the creation of e-invoices or whether this will be implemented in the future.
Exceptions to the obligation: E-invoicing is not mandatory in every case. For example, small-amount invoices (§ 33 UStDV) can still be sent as “other invoices”, e.g. in paper form. The same applies to travel tickets (§ 34 UStDV).
Advantages of e-invoices for your company
By using e-invoicing, your invoices are automatically created in the correct form with all the necessary details. This offers advantages not only for public institutions, but also for other clients and suppliers who issue or receive invoices.
- Simpler invoicing: Invoicing is simplified by clear and unambiguous standards.
- Lower costs: e-invoicing processes can save up to 60 percent compared to paper invoices: This is because many costs, such as for paper, printing or postage, are eliminated.
- Efficient workflows: Digital documents create processes without media disruptions – and the approval process for incoming invoices is noticeably faster.
- Less time spent: error-prone manual entries are eliminated. This improves the quality of bookkeeping and the time can be used for value-adding activities.
- Optimized cash management: Faster processed invoices enable discounts to be deducted – faster delivered invoices accelerate the receipt of payments.
- Location-independent transmission: Digital transmission enables invoices to be sent quickly and reliably, regardless of location.
Overview for e-invoicing and transition periods
The introduction of mandatory e-invoicing is part of the Growth Opportunities Act, which was passed by the Federal Council on March 22, 2024. The new regulations on the obligation to issue electronic invoices will come into force on January 1, 2025. However, transitional periods have been introduced to facilitate the changeover:
- From 01.01.2025:
The priority of paper invoices will no longer apply. Every company must be able to receive e-invoices. In addition, PDF invoices may only be sent with the consent of the recipient. - From 01.01.2027:
Companies with an annual turnover from 2026 of over EUR 800,000 must send B2B e-invoices. Companies with a previous year’s turnover of less than EUR 800,000 may continue to send the previous invoice formats (paper, PDF, etc.). EDI (Electronic Data Interchange) procedures may be used unchanged. - From 01.01.2028:
All companies must send B2B e-invoices and no more exemptions apply. Accordingly, EDI systems must also be adapted to the legal requirements.
Further information on the subject of e‑invoice:
What is an e‑invoice? – rocurement Office of the Federal Ministry of the Interior
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