Germany issues update on 2025 e-invoicing mandate

The German Ministry of Finance has published a draft letter providing guidance on the upcoming e-invoicing mandate. Here are the key takeaways:

• Future E-Reporting Requirements: While current requirements lack an e-reporting aspect, the Ministry of Finance has indicated that e-reporting requirements will be introduced later.
• Receiving E-Invoices: Businesses must be able to receive e-invoices (AP) by January 2025. An email inbox is sufficient to comply, though parties may agree on other electronic transmission channels.
• Issuing E-Invoices: Businesses will be required to issue electronic invoices in phases between 2027 and 2028, in either structured or hybrid formats.
  • Structured: Any format compliant with EN 16931 or one that allows correct and complete extraction to EN 16931.
  • Hybrid: A combination of structured and human-readable (PDF) formats.
• Scope of E-Invoicing Requirement: The e-invoicing mandate will cover all domestic transactions, except for:
  • Tax-free service invoices
  • Invoices valued up to 250 Euros
  • Tickets
• Non-Residents: These requirements apply to businesses established in Germany. Non-residents without a registered office, domicile, or habitual residence in Germany are not subject to these requirements.
• Input VAT Deductions: Once e-invoicing becomes mandatory, input VAT deductions will only be possible using electronic invoices.

The draft letter is now open for comments, with the final publication planned for the beginning of the fourth quarter of 2024.