eInvoicing Documentation
eInvoicing in Germany
Legislation
The e-Bill law, published in April 2017, and the Regulation on eInvoicing from September 2017 mandate the reception and processing of eInvoices for all federal contracting authorities, regardless of the amount of the invoice[1]. The e-Bill law also provides for specific dates for the implementation of eInvoicing: from 27 November 2018, the top federal state authorities must be able to receive and process eInvoices and, from 27 November 2019, all subordinate institutions and sectorial contracting authorities on the federal level. Since 27 November 2020, the issuing and processing of eInvoices to all Federal governments’ public contracting authorities is mandatory[2],[3]. It is mandated that eInvoices are issued, processed and accepted in XRechnung format to and by all central public authorities[4] as well as to and by all authorities of the state of Bremen.
The law applies exclusively to regulations for federal agencies (including sectorial contractors and licensors). The state or local authorities affected by the Directive 2014/55/EU require additional legislation by the federal states (Länder).
On the federal level (Länder), the Directive is fully transposed into supplementary legislation. Since 18 April 2020, authorities of the federated states are mandated to accept eInvoices[5].
On 23 March 2024, the Act to Strengthen Growth Opportunities, Investment and Innovation as well as Tax Simplification and Tax Fairness (Growth Opportunities Act) was issued by the the Federal Ministry of Finance. The Growth Opportunities Act established that, as of 1 January 2025, eInvoicing becomes the default method to issue invoices in Germany, but they will not be mandated yet for everyone. Businesses must be prepared to receive eInvoice with the EN 16931. However, the supplier is still allowed to issue paper invoices for invoices in unstructured format and non-EN-compliant EDI invoices, as long as buyer’s consent is provided.
As of 1 January 2027, business with a turnover above EUR 800 000, 00 are no longer allowed to issue invoices on paper or in unstructured electronic format.
As of 1 January 2028, the obligation will be extended to all remaining businesses.
eInvoicing platform and eInvoicing management solutions
There are different eInvoicing platforms mandated or recommended by the German government for B2G public procurement. The obligation to use a specific eInvoicing platform depends on which public authority is to be addressed. Despite the existence of multiple platforms, Germany has implemented a unified routing system. This routing ID (Leitweg ID) allows the invoicing platform to transmit eInvoices to public contracting authorities. The Leitweg ID is a mandatory element in the XRechnung schema, each ID is composed of a state code, fine addressing and check digit, while government, district and municipal codes remain voluntary.
The Federal Central Invoice Receiving Platform (ZRE) a central federal incoming invoice platform was developed to support federal administrations in receiving and accepting eInvoices. While the ZRE obliges all companies to submit eInvoices in the XRechnung standard, a second platform has been developed for suppliers (the online access law-compliant invoice receipt platform, OZG-RE). However, not all federal states use the OZG-RE as most of them have a portal at the federal level.
In addition, all authorities at federal and national level are mandated to always offer a Peppol transmission if an automated data exchange is provided for the delivery of eInvoices. The XRechnung format being specific to Germany, economic operators should select a provider that is accredited by the German Peppol Authority. This ensures that the service provider conducts Peppol transactions in Germany.
Some private companies offer eInvoicing solutions, some of these service providers can also be publicly-owned.
The transmission channels differ according to the authority: upload, online form, e-Mail, De-Mail, web service (for minimum Peppol – the decision is taken by the National IT Planning Council).
Approach for receiving and processing eInvoices
Most eInvoicing operations are conducted following bilateral agreements between public entities and economic operators (or solutions providers acting on their behalf).
The approach for receiving and processing eInvoices submitted by economic operators is decentralised. Public entities receiving eInvoices decide whether to process eInvoices as structured data or according to a non-automated process. The Peppol network can be used with Peppol BIS 3 standards as well as XRechnung (cf explanations in section 2)[6].
Within the B2G context issuing of eInvoices is mandated for all suppliers to all federal and Bremen contracting authorities, while receiving is mandatory for all public contracting authorities (Federal central government authorities as well as federated state authorities). Electronic invoices do not need to be electronically signed and need to be archived for ten years, which, under conditions, is possible abroad[7].
For B2B transactions, the German Bundestag parliament had called for the adoption of B2B mandatory eInvocing to help combat VAT fraud. The German government's suggestion would be consistent with the European Value-added Tax in the Digital Age (ViDA) initiative, which involves utilizing the EN 16931 European electronic invoice standard.
On the 22 March 2024 the Bundesrat approved the Wachstumschancengesetz project. The project established a defined timeline for the implementation of the B2B mandate.
The timeframe follow will be this:
- Mandatory issuance of eInvoices for companies with an annual turnover exceeding 800 000, 00 EUR. In 2027
- Mandatory issue of eInvoice for every B2B transaction in 2028
eInvoicing implementation in sub-central level contracting authorities
The implementation at the federal level differs depending on which public contractor is addressed. Therefore, it is necessary to contact the public contractor before invoicing.
Each federated state may choose to implement the model determined by the Core Invoice User Specification (CIUS) or an own eInvoicing standard for the sending, receiving and processing of eInvoices to state authorities. Supplier to federal authorities must issue eInvoices in either Xrechnung format or another format that meets the European standard requirements from 27 November 2020[8].
Similarly, each state may choose whether the central government’s platform (Zentrales Rechnungseingangsportal OZG-RE) is used for processing the eInvoices or whether an own platform is used.
- Berlin, Brandenburg, Mecklenburg-Vorpommern, Saxony, and Thuringia are using the central government’s platform, while
- Baden-Württemberg, Bavaria, Bremen, Hamburg, Lower Saxony, North Rhine Westphalia, Saarland, Saxony-Anhalt, and Schleswig-Holstein are using other (local) invoicing portals.
More details on the eInvoicing solutions at state level authorities available.
Status on the implementation of the European Standard on eInvoicing (EN)
Due to the federal structure in Germany, the federal government and the 16 states must each pass their eInvoicing laws to implement the Directive. On the federal level, the E-bill law is in place since 2017. On the state level, the different laws have been passed.
As part of the implementation of the Directive 2014/55/EU on electronic invoicing in public procurement in Germany, the National IT Planning Council has made two decisions:
- In June 2017, it was mandated for public authorities to receive and process XRechnung invoices. National authorities can accept other formats next to XRechnung.
- In April 2018, it was decided to establish a standard web service for public authorities to transport eInvoices (i.e. Peppol). The decision on timeline and conditions for using and joining the Peppol eDelivery Network for federal, regional and local authorities was made in October 2018 (with special consideration of the involvement of local authorities). National authorities can accept other ways of transport of eInvoices.
As part of these decisions, the Coordination Office for IT Standards (KoSIT) was given the responsibility to maintain XRechnung and to become the German Peppol Authority. KoSIT is located within the eGovernment division of the core administration of the Free Hanseatic City of Bremen but is a permanent organisation of the National IT Planning Council.
Germany also offers the usage of ZUGFeRD 2.1 which is a hybrid eInvoice format. ZUGFeRD includes two elements: a PDF file and an embedded XML file. ZUGFeRD is based on the international UN/CEFACT standard Cross Industry Invoice (CII) and the ISO standard PDF/A-3. The latest version ZUGFeRD 2.1 complies with EU Directive 2014/55/EU and the German E-Invoice Regulation[9].
Use of Core Invoicing Usage Specifications (CIUS) at national level
XRechnung and ZugFeRD 2.0/2.1 represent the national CIUS for eInvoicing and are compliant with the EN. XRechnung is a pure data record while an eInvoice in standard ZUGFeRD 2.0 is composed of a data record and a human-readable document in the form of a PDF. National authorities can accept other formats next to XRechnung. Germany may also make use of the Peppol BIS Billing 3.0.
Digital reporting requirements
On 25 October 2022, the German Congress (Deutscher Bundestag) published a document in which the Federal Ministry of Finance informs about the measures it is taking to reduce tax fraud in the country. The government intends to modernise the tax system to create, verify, and send invoices and improve communications between public administrations and businesses. The ministry explains that among the proposals that are actively being considered, are the expansion of the VAT reverse charge mechanism and the establishment of nationwide eInvoicing and digital reporting systems that help. The ministry is further examining the structure and effectiveness of the eInvoicing models adopted by other countries of the European Union, such as Italy and Belgium, and other parts of the world, like Mexico, South Korea, and Turkey. The document does not specify a timetable for when those measures would be adopted but explains that the Bundestag would need to approve them once proposed. The German government's suggestion would be consistent with the European Value-added Tax in the Digital Age (ViDA) legislation, which involves utilising the EN 16931.
Additional information
The German eInvoicing Forum (Forum elektronische Rechnung Deutschland – FeRD) is an important organisation in the German eInvoicing ecosystem. The FeRD was founded by the Working Group for Economic Management (Arbeitsgemeinschaft für Wirtschaftliche Verwaltung e.V. - AWV) in 2010. It aims to foster the use of eInvoicing in the public and private sectors. The FeRD is an industry-neutral forum, composed of members from ministries and other governmental bodies and important industry associations. FeRD is a voluntary organization based on contributions and resources from its members and experts.
It is also important to mention that possible future changes are foreseeable in the German eInvoicing system. A proposition requested that, the definition of electronic invoice will change to: “invoice issued, submitted and received in a structured electronic format allowing an electronic processing.” This definition will require the establishment of a common format. The common format adopted will be the EN 16931 in compliance with the Directive 2014/55/EU.
NO VERIFICATION[1] In this sense, the e-Bill law goes further than the Directive 2014/55/EU which makes eInvoicing compulsory for any amount above the determined threshold, [2] (§ 3 E-Rechnungsverordnung (ERechV), 2020), [3] (§ 11 E-Rechnungsverordnung (ERechV), 2020), [4] Federal Ministry of the Interior and Community, Key points on eInvoicing, [5] Federal Ministry of the Interior and Community, Timeline of the eInvoicing legislation, [6] XStandards Einkauf, [7] Federal Ministry of the Interior and Community, §14b of the VAT Act (Umsatzsteuergesetz, UstG), [8] Federal Ministry of the Interior and Community, Information on einvoicing in Germany’s federal states, [9] Forum elektronische Rechnung Deutschland( FeRD), Standards.