Legislation
E-invoices in public procurement:
The Federal e-Invoice Act, published in April 2017, and the Federal e-Invoice Regulation from September 2017 mandate the receipt and processing of e-invoices for all federal clients, regardless of the invoice amount [1]. The e-Invoice Act also specifies deadlines for the implementation of e-invoicing: By November 27, 2018, the highest federal authorities must be able to receive and process e-invoices, and by November 27, 2019, this applies to all subordinate institutions and sectoral clients at the federal level. Since November 27, 2020, the issuance and processing of e-invoices to all public clients of the federal governments is mandatory [2],[3]. E-invoices must be submitted in the XInvoice format or compliant with EN16931 to all central public authorities of the federal government and must be accepted by them.
The law exclusively applies to regulations for federal authorities (including sectoral contractors and licensors). State or municipal authorities affected by Directive 2014/55/EU require additional laws from the federal states.
Within the Federal Republic of Germany, all federal states have fully implemented the directive into supplementary laws. Since April 18, 2020, authorities of the federal states are also required to accept e-invoices[4].
E-invoices in the B2B environment:
On March 23, 2024, the law to strengthen growth opportunities, investments, and innovation, as well as to simplify taxes and ensure tax equity (Growth Opportunities Act), was published by the Federal Ministry of Finance. The Growth Opportunities Act stipulates that from January 1, 2025, e-invoicing will become the standard method of invoicing in the B2B environment in Germany, but it will not be mandatory for all at that time. Companies must receive e-invoices compliant with EN 16931 by January 1, 2025. However, suppliers may continue to issue paper invoices for invoices in unstructured format and non-EN-compliant EDI invoices, provided that the buyer's consent is given.
From January 1, 2027, companies with a prior year turnover of over €800,000.00 will no longer be allowed to issue invoices on paper or in unstructured electronic format; EN-compliant EDI invoices will still be possible if a bilateral agreement exists between the contracting parties.
From January 1, 2028, this obligation will be extended to all remaining companies.
On October 15, 2024, the German Federal Ministry of Finance (BMF) published the final version of its letter regarding e-invoicing, which retains many contents from the draft version but includes clarifications and adjustments. Notably, the draft version stated that a separate electronic mailbox is necessary to meet the requirement for receiving e-invoices from January 1, 2025, while the final version clarifies that this is not required, and providing an email address is sufficient. Furthermore, the Peppol BIS e-invoice format has now been included as an example of permissible European invoice formats, while the previously mentioned Italian format, FatturaPA, has been omitted[5].
E-invoicing platforms and e-invoicing management solutions
There are various e-invoicing platforms prescribed or recommended by the German government for public procurement B2G. The obligation to use a specific e-invoicing platform depends on which public authority is being addressed. Despite the existence of several platforms, Germany has implemented a unified routing system. This routing ID (routing path ID) enables the invoicing platform to transmit e-invoices to public clients. The buyer reference (BT-10) is a mandatory element in the XInvoice schema, where, among other things, the routing path ID can be used. Each routing path ID consists of a country code, a fine addressing, and a check digit, while government, district, and municipal codes remain voluntary.
The central incoming platform for invoices (ZRE), a central platform for incoming federal invoices, has been developed to assist federal administrations in receiving and accepting e-invoices. While the ZRE requires all companies to submit e-invoices in the XInvoice standard, a second platform for suppliers has been developed (the legally compliant invoice receipt platform OZG-RE). However, not all federal states use the OZG-RE, as most of them have a state-level portal.
In addition, all authorities at the federal and state levels are required to always offer Peppol transmission when automated data exchange is planned for the delivery of e-invoices. The XInvoice format is specific to Germany; economic actors should choose a provider accredited by the German Peppol authority. This ensures that the service provider conducts Peppol transactions in Germany.
Some private companies offer e-invoicing solutions, and some of these service providers can also be public.
The transmission channels differ by authority: upload, online form, email, De-Mail, web service (for minimal Peppol – the decision is made by the National IT Planning Council).
Approach to receiving and processing e-invoices
Most e-invoicing operations are based on bilateral agreements between public entities and economic actors (or solution providers acting on their behalf).
The approach to receiving and processing e-invoices submitted by economic actors is decentralized. Public entities receiving e-invoices decide whether to process e-invoices as structured data or according to a non-automated process. Provided suppliers submit e-invoices compliant with EN16931, they must be accepted and processed by public clients. The Peppol network can be used with both the Peppol BIS 3 standards and XInvoice[6].
In the B2G context, the issuance of e-invoices is mandatory for all suppliers to all federal clients and, for example, the federal states of Bremen and Hesse, while the receipt is mandatory for all public clients (federal authorities as well as authorities of the federal states). Electronic invoices do not need to be electronically signed and must be archived for ten years[7].
For B2B transactions, the German Bundestag has called for the introduction of a B2B e-invoicing obligation to combat VAT fraud. The German government’s proposal would align with the European initiative on VAT in the digital age (ViDA), which calls for the use of the European e-invoicing standard EN 16931.
On March 22, 2024, the Federal Council approved the Growth Opportunities Act. The law sets a defined timeline for the implementation of the B2B mandate.
The timeline will be as follows:
- Mandatory issuance of e-invoices for companies with a prior year turnover of over €800,000.00 in 2027
- Mandatory issuance of e-invoices for every B2B transaction in 2028.
Implementation of e-invoices for subnational level clients in the B2G context
The implementation at the federal level varies depending on the public client being addressed. Therefore, it is necessary to contact the public client before invoicing.
Each federal state can decide whether to implement the model established by the Core Invoice User Specification (CIUS) or its own e-invoicing standard for sending, receiving, and processing e-invoices to state authorities. Suppliers to federal authorities must issue e-invoices either in the XInvoice format or in another format that meets the European standard requirements from November 27, 2020[8].
Similarly, each federal state can decide whether to use the federal government's platform (Central Invoice Receipt Portal OZG-RE) for processing e-invoices or to use its own platform.
- Berlin, Brandenburg, Mecklenburg-Vorpommern, Saxony, and Thuringia use the federal government's platform, while
- Baden-Württemberg, Bavaria, Bremen, Hamburg, Lower Saxony, North Rhine-Westphalia, Saarland, Saxony-Anhalt, Hesse, and Schleswig-Holstein use other (local) invoicing portals.
Further information on e-invoicing solutions at the level of state authorities is available.
Status of implementation of the European standard for e-invoicing (EN)
Due to the federal structure in Germany, the federal government and the 16 federal states must each enact their e-invoicing laws to implement the directive. At the federal level, the e-invoicing law has been in force since 2017. At the state level, different laws have been enacted.
As part of the implementation of Directive 2014/55/EU on electronic invoices in public procurement in Germany, the National IT Planning Council has made two resolutions:
- In June 2017, it was mandated that public authorities must at least receive and process XInvoice invoices. National authorities can also accept other formats in addition to XInvoice.
- In April 2018, it was decided to establish a standardized web service for public authorities for the transport of e-invoices (i.e., Peppol). The decision regarding the timelines and conditions for the use and joining of the Peppol eDelivery network for federal, state, and municipal authorities was made in October 2018 (with particular consideration of the involvement of municipal authorities). National authorities may also accept other transport routes for e-invoices.
As part of these decisions, the Coordination Office for IT Standards (KoSIT) was entrusted with the responsibility for maintaining XInvoice and establishing it as the German Peppol authority. KoSIT is located within the eGovernment department of the core administration of the Free Hanseatic City of Bremen but is a permanent organization of the National IT Planning Council.
Germany also offers the use of ZUGFeRD 2.3, a hybrid e-invoicing format. ZUGFeRD consists of 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 2.3, complies with EU Directive 2014/55/EU and the German e-invoicing regulation[9].
Use of Core Invoicing Usage Specifications (CIUS) at the national level
XInvoice and ZUGFeRD 3.1 represent the national CIUS for e-invoicing and are compliant with the EN. XInvoice is a pure data format, while an e-invoice in the ZUGFeRD 2.3 standard consists of a data record and a human-readable document in the form of a PDF file. National authorities may accept other formats in addition to XInvoice. Germany can also utilize the Peppol BIS Billing 3.0.
Digital reporting obligations
The law to strengthen growth opportunities, investments, and innovation, as well as to simplify taxes and ensure tax equity (Growth Opportunities Act), does not contain a digital reporting obligation. However, it is foreseeable that Germany will attempt to align with the reporting obligations imposed by ViDA in the near future.
Additional Information
The Forum Electronic Invoice Germany (FeRD) is an important organization in the German e-invoicing system. FeRD was established in 2010 by the Association for Economic Administration e.V. (AWV). Its goal is to promote the use of e-invoices in the public and private sectors. FeRD is a cross-industry forum composed of members from ministries and other government agencies, as well as important industry associations. FeRD is a voluntary organization based on contributions and resources from its members and experts.
VERIFIED[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, Timeline of the eInvoicing legislation, [5] E-invoicing compliance in Germany | Pagero, [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.