Since 2025, companies in Germany have had to be able to receive e-invoices; from 2027, the first companies must also issue them. Many businesses are not yet prepared for this. Here, we explain what an e-invoice is, what deadlines apply, and how you can make the transition without stress.
What an e-invoice is and what it isn’t
An e-invoice is an invoice in a structured electronic format that software can read and process without manual data entry. The European standard EN 16931 applies. The invoice data is provided as a machine-readable file, typically in XML format.
A PDF invoice is not an e-invoice, even if it arrives by email. Legally, it counts as an “other invoice.” The same applies to scanned paper invoices or photos. The difference is crucial: a PDF must be read by a person, while an e-invoice can be imported directly into accounting software. The advantage is most visible with large numbers of invoices: the invoice number, date, amounts, and tax rates go into the books without anyone typing them in.
In Germany, two formats are particularly widespread. XRechnung is a pure data format that is not easily readable without a special program. ZUGFeRD combines a readable PDF with embedded XML data, allowing both humans and machines to use the same invoice. ZUGFeRD meets the requirements starting with version 2.0.1, though not in every profile.
Who is affected?
The requirement applies to invoices between businesses in Germany, that is, to services provided by one business based in Germany to another. Invoices to private customers are not affected, nor are invoices to customers abroad. Freelancers and associations are affected to the extent that they are businesses for VAT purposes and provide taxable services to other businesses.
- Small-amount invoices: invoices up to 250 euros gross may still be issued on paper or as a PDF
- Transportation tickets: tickets for passenger transportation are exempt
- Businesses under the small business scheme: they must be able to receive e-invoices but are exempt from the requirement to issue them
- Tax-exempt services: for transactions that are tax-exempt under § 4 nos. 8 to 29 UStG, such as medical treatment or tax-exempt rentals, there is no e-invoicing requirement
Separate rules have long applied to invoices issued to public contracting authorities. The federal government, the states, and many municipalities require e-invoices, usually in the XRechnung format and with a routing ID provided by the contracting authority.
Deadlines at a glance
The transition is taking place in phases. It is important to distinguish between receiving and issuing e-invoices.
- As of 1 January 2025: all domestic companies must be able to receive e-invoices
- Through 31 December 2026: paper invoices and other electronic formats such as PDF are still allowed for outgoing invoices, PDF only with the recipient’s consent
- Effective 1 January 2027: companies with prior-year revenue over 800,000 euros must issue e-invoices
- Through 31 December 2027: companies below this revenue threshold may still use paper and other formats
- Effective 1 January 2028: all companies must issue e-invoices for domestic transactions
There are additional transition rules for certain electronic data exchange processes between businesses. Check with your tax advisor to determine which deadline applies to your business, especially if your revenue is close to the threshold.
Receiving e-invoices: what applies right now
The obligation to receive e-invoices initially means only that you must be able to accept an e-invoice. An email inbox is sufficient for this purpose. You may not refuse an e-invoice on the grounds that you would prefer a paper copy.
In practice, however, simply receiving an e-invoice isn’t enough. An XRechnung is virtually unreadable without the right software, and it must be checked, posted, and archived. It therefore makes sense to have a dedicated address for invoices, such as a separate mailbox, from which invoices go directly into your bookkeeping. Many accounting programs and receipt portals read the data automatically.
Make sure that e-invoices don’t end up in personal inboxes. If suppliers send invoices to individual employees, they can easily get lost. Therefore, let your suppliers know which address invoices should be sent to in the future.
Issuing e-invoices: how to make the switch
To issue e-invoices, you’ll need invoicing software that generates them. Most common programs can do this now, often in the ZUGFeRD or XRechnung formats. If you still write invoices in a word processor, you should switch in good time.
Be sure to check your master data: customer addresses, VAT identification numbers, order numbers, and, for public contracting authorities, the routing ID. An e-invoice is only as good as the data it’s based on. Test your first invoices using a validation program or with a customer who already processes e-invoices.
Clarify with key customers what format they expect invoices to be in. Large companies often have their own specifications or portals. Knowing this early on helps you avoid rejected invoices and delayed payments.
Archiving and posting
E-invoices must be stored in their original format, that is, as the XML file, not just as a printout or image. The storage must be tamper-proof and keep the invoice legible for the entire retention period. For accounting records, the retention period is generally eight years.
For bookkeeping, the e-invoice is an advantage: data is imported rather than retyped, and data entry errors disappear. For this to work, however, the invoice has to reach the bookkeeping by the right route. A receipt portal or a client portal with an archive is the simplest way to achieve this.
One point for the tax advisor: as soon as a supplier is required to issue e-invoices, the question is how to handle invoices in other formats, for example for the input VAT deduction. The tax advisor assesses how you should proceed here.
Common mistakes during the transition
In practice, we see the same stumbling blocks time and again. Most can be avoided with little effort once you’re aware of them.
- Mistaking a PDF for an e-invoice: a PDF sent by email does not meet the obligation to issue e-invoices
- Keeping only the printout: if you delete the XML file, you no longer have the original
- Invoices in personal email inboxes: they get lost during vacations or staff changes
- Misjudging the revenue threshold: what counts is the total revenue of the previous year, not revenue with individual customers
- Forgetting credit notes: if you settle accounts with credit notes, for example with subcontractors, you are issuing invoices to which the same rules apply
- Starting too late: switching software, master data, and tests take more time than you might think
So plan the transition several months in advance, not in the final weeks before the deadline. A quiet month without annual financial statements and without a seasonal peak is ideal for this.
Checklist for the transition
- Receiving: set up a fixed address for invoices and tell your suppliers
- Reading and checking: a program or portal that displays and reads XRechnung and ZUGFeRD
- Approval: decide who checks invoices for content and approves them
- Archive: tamper-proof storage in the original format for the entire retention period
- Issuing: switch your invoicing software to e-invoicing and check master data
- Customers: clarify the format preferences and portals of your key customers
- Deadline: clarify with your tax advisor when you must start issuing e-invoices
- Test: have the first invoices checked before the requirement takes effect
How GKM helps with the transition
We review with you how invoices come in and go out today, set up receiving and filing, and make sure that e-invoices flow directly into your bookkeeping. For issuing, we advise you on choosing invoicing software and on master data; with Rekana Rechnung, we also offer our own program for this. More on the E-invoicing and Digitization pages.
The tax advisor is responsible for assessing individual cases for tax purposes, for example the deadline when revenue is close to the threshold, or the input VAT deduction. The comparison DATEV, Lexware Office, or sevdesk shows which programs suit small businesses.
Sources
Laws and bodies named in the article. The legal texts link to gesetze-im-internet.de, in German.
- EN 16931: European standard for electronic invoicing
This article is for general informational purposes only and does not constitute tax or legal advice in specific cases. A tax advisor is responsible for tax-related questions.