e-Invoicing in Germany: Guidelines, Timeline, Scope, Requirements & Format

Germany has announced mandatory e-invoicing requiring all VAT-registered businesses to issue structured, machine-readable electronic invoices for domestic B2B sales. This reform standardizes invoice formats, enhances tax compliance, and gradually phases out traditional paper and PDF invoices for most business dealings.

Key Takeaways: e-Invoicing Requirements in Germany

• e-invoices must use structured formats like XRechnung or ZUGFeRD 2.1+, enabling automated processing.
• All businesses must accept e-invoices from January 2025, issuing becomes mandatory in phases until universal compliance by 2028.
• e-Invoice must include detailed seller, buyer, tax, and transaction information, plus relevant references.
• Transmission methods are flexible, including email attachments, e-invoicing platforms, or Peppol, all of which are valid if the format is compliant.
• Government doesn’t validate, store, or get involved in any part of the e-invoicing process for now.
• e-invoices must be securely archived in their original format for at least 10 years.
• Exemptions apply to B2C transactions, invoices under €250, passenger tickets, and VAT-exempt sales, and inter EU transactions

What is e-Invoicing in Germany?

e-Invoicing, or electronic invoicing, is the process of issuing, sending, receiving, and storing invoices in a structured digital format that enables seamless, automated processing by computers without manual data entry or paper handling.

e-Invoicing in Germany refers to the legal mandate that requires German businesses to use structured digital invoices for business transactions, especially between companies (B2B). E-invoicing is much more than just sending an invoice by email. 

It’s about exchanging invoices as structured, machine-readable data that enables automation, compliance, and efficiency now required by law for B2G and B2B transactions in Germany.

Key Characteristics of Germany e-Invoicing

• Create e-invoices in XRechnung (XML) or ZUGFeRD (PDF with embedded XML) format, following EN 16931.
• Include all legally required invoice details (buyer, seller, VAT, etc.).
• Send e-invoices via email, Peppol network, or e-invoicing platforms.
• Recipients must be able to receive and process the structured file.

e-Invoicing Implementation Timeline

Germany is transitioning from voluntary electronic invoicing to a phased mandatory e-invoicing system for all B2B transactions. While e-invoicing has been required for business-to-government (B2G) invoices since 2020, the focus is now on B2B e-invoicing. 

Scope of E-Invoicing in Germany

The e-invoicing mandate applies to business-to-business (B2B) transactions within Germany, specifically where both the supplier and recipient are established or have a fixed establishment in the country. 

This means that German companies conducting transactions with each other must comply with e-invoicing requirements.

Who is covered under e-Invoice

• All domestic B2B invoices where both trading partners are based in Germany.
• Any taxable supply of goods or services subject to German VAT law.

e-Invoicing Exemptions in Germany

1. Small-amount invoices (gross total ≤ €250)
2. Passenger transport tickets
3. VAT-exempt transactions as defined by specific provisions in the VAT Act (UStG)
4. Foreign businesses that are only VAT-registered in Germany, but do not have a fixed establishment, are not subject to this mandate.
5. Cross-border transactions whether incoming or outgoing.
6. Business-to-consumer (B2C) transactions: Sales to private individuals remain outside the scope. Traditional formats such as paper receipts or PDFs can still be used for consumer sales.

e-Invoice Formats in Germany: XRechnung & ZUGFeRD

Germany’s legal foundation for e-invoicing is based on the European Norm EN 16931, which defines the minimum data set and structure for electronic invoices. Germany’s two main e-invoice formats ensure broad compliance and efficiency in electronic processing.

1. XRechnung

• This is Germany’s official implementation of the European Norm (EN) 16931 standard.
• It is an XML-based format designed to ensure all the essential invoice data can be automatically extracted and validated by recipient systems.
• XRechnung is mandatory for all invoices issued to German public sector authorities (B2G) and will also be the default format for B2B e-invoicing from 2025.
• The specification is maintained by KoSIT (Coordination Office for IT Standards) and is regularly updated to reflect EU and German legal requirements.
• It is not intended to be human-readable; instead, it is processed by software or viewed through specialized tools.

2. ZUGFeRD

• ZUGFeRD (Zentraler User Guide Forum elektronische Rechnung Deutschland) is a hybrid format.
• It combines a human-readable PDF/A-3 document with an embedded XML file that carries structured invoice data.
• The latest ZUGFeRD 2.x profiles are compliant with EN 16931, and the “XRechnung-compatible” profile is accepted for both B2G and (soon) B2B invoices.
• This format is popular because it bridges the gap between fully digital processing and user-friendly readability for accounting staff.

Key Features of German e-invoice Format

• Compliance with EU Standards: Both formats are built to meet EN 16931, ensuring interoperability across Europe.
• Machine Readability: All mandatory invoice information is included in a structured, extractable way.
• Flexibility: Businesses can choose between pure XML (XRechnung) or a hybrid (ZUGFeRD), depending on their and their trading partners’ needs

e-Invoicing Framework in Germany

Germany’s e-invoicing framework is built to enable flexible, secure, and interoperable electronic invoice exchanges across both the private and public sectors.

• Decentralized Exchange: Unlike some countries, Germany does not require B2B invoices to pass through a central government portal (clearance model). Instead, invoices are exchanged directly between businesses, using email, EDI (Electronic Data Interchange), or networks like Peppol.
• Public Sector (B2G) Portals: For invoicing public entities, suppliers must use official portals such as the E-Rechnungsportal Bund or OZG-RE at the federal level, or state-specific platforms. These are Peppol-enabled and accept XRechnung and compatible ZUGFeRD files.
• Post-Audit Model: Germany uses a post-audit model for e-invoicing, meaning tax authorities may request invoices for audit after the fact but do not automatically receive all invoices in real time.

e-Invoicing Process in Germany

Electronic invoice exchange in Germany relies on structured data, compliance with legal standards, and digital automation. 

1. Invoice Generation: 

Businesses create e-invoices using ERP, accounting software, or an e-invoicing solution provider. These providers ensure invoices are formatted as XRechnung (XML) or ZUGFeRD (PDF/A-3 + XML) and contain all required data for VAT compliance.

2. Transmission:  

Invoices are sent directly to trading partners via email, EDI, Peppol network, or service provider platforms. The exchange channel is chosen by agreement, but the invoice must remain in a structured format. 

Invoices to government bodies are submitted through official portals (E-Rechnungsportal Bund, OZG-RE, or state platforms). E-invoicing solution providers can automate submission, integrate with these portals, and validate file compliance.

3. Receipt and Validation: 

The recipient’s software or e-invoicing provider validates the invoice for format and data integrity. Valid e-invoices are automatically processed into ERP or accounting systems.

4. Archiving: 

All e-invoices must be archived in their original electronic format for 10 years, ensuring authenticity, integrity, and legal audit-readiness. 

How Germany’s e-Invoicing Differs

Germany’s e-invoicing approach contrasts with other European countries like France and Poland, especially in terms of centralization, clearance requirements, and transmission models. The following table outlines the main differences:

How Businesses Should Transition to E-Invoicing in Germany

Transitioning to e-invoicing is now a strategic necessity in Germany due to new legal mandates and the need for digital efficiency. Companies must ensure compliance while improving invoice accuracy, speed, and traceability.

• Map Current Invoice Flows: Document how invoices are created, approved, sent, received, and archived. Identify gaps in digitalization and pinpoint manual bottlenecks.
• Understand Compliance Requirements: Review which transactions require e-invoicing (B2B, B2G), applicable formats (XRechnung, ZUGFeRD), and upcoming deadlines based on company size and turnover.
• Upgrade IT Infrastructure: Ensure your ERP or accounting software supports structured e-invoice formats. Evaluate whether existing systems require integration modules or a switch to more advanced platforms.
• Select the Right E-Invoicing Provider: Compare features, compliance coverage, integration options, and user support among solution providers. Look for certified Peppol access and automatic format validation.
• Establish Internal Policies: Develop standard operating procedures for issuing, receiving, and archiving e-invoices. Define roles, responsibilities, and escalation paths for invoice exceptions or errors.
• Train Employees and Communicate Externally: Provide targeted training for accounting, IT, and operations staff. Inform business partners of your new e-invoicing capabilities and preferred exchange channels.
• Test Thoroughly Before Going Live: Pilot e-invoicing with selected suppliers and customers to ensure interoperability, error handling, and seamless workflow integration.
• Monitor Regulatory Changes: Regularly review government updates and solution provider communications to stay ahead of evolving legal and technical requirements.

ClearTax E-Invoicing Solution

ClearTax offers a robust e-invoicing platform built for German regulatory needs, providing seamless integration, automation, and centralized management for businesses transitioning to digital invoicing.

• ERP Integration & Middleware: Connects directly with leading ERPs (SAP, Oracle, Dynamics) and acts as middleware for data mapping, enrichment, and validation, ensuring invoices always meet legal standards.
• Centralized Cloud Portal: Enables invoice generation, viewing, archiving, downloading, and real-time tracking, all in one secure dashboard.
• Peppol Accredited: Certified for direct, compliant e-invoice exchange across Germany and the EU public sector.
• Automation & Compliance: Features automatic data validation, regulatory updates, and secure storage for 10 years.

Scalable & Secure: Cloud-based, multi-entity support, advanced security, and expert onboarding for businesses of any size.

Conclusion

The e-Invocing mandate in Germany applies strictly to B2B transactions where both parties are established in Germany. Public sector entities already require e-invoices since 2020, submitted through official portals like the E-Rechnungsportal Bund or state systems. 

Unlike countries with centralized clearance models, Germany follows a decentralized, post-audit approach: invoices are exchanged directly between businesses without real-time tax authority validation. 

This model prioritizes interoperability and flexibility while laying the foundation for potential future EU-wide real-time reporting under the VAT in the Digital Age initiative.