E-invoicing has green light in Germany
From 1 January 2025, companies established in Germany are obliged to use electronic invoicing for all transactions between local business partners. This makes Germany the first country to introduce e-invoicing under the approved VAT in the Digital Age (ViDA) Directive. This step leads to the need to digitise business processes not only in Germany.
Electronic invoicing, also known as e-invoicing, will be mandatory for all transactions between resident (German) business entities (B2B transactions). Exceptions will be tax documents issued for transactions that are exempt from VAT, tax documents issued for amounts up to EUR 250, and travel tickets. In these cases, the tax documents may be on paper or in another electronic format (e.g. PDF), i.e., without a structured data format.
Electronic invoicing is currently not applicable to foreign entities, e.g., those that are "only" registered for VAT in the Federal Republic of Germany. From 1 January 2025 to 1 January 2027, there is a transitional period during which standard printed tax documents can be used and are on an equal footing with electronic tax documents. Czech entities may be affected by e-invoicing indirectly. If you have German suppliers, you should be prepared for the possibility that the supplier will not be able to technically distinguish between a tax document issued for a German customer and a tax document for a foreign customer. In such a case, Czech companies need to be prepared to convert the e-document from XML or UBL format to a human-readable format (e.g. PDF or HTML).
The e-documents issued by German companies for local transactions are already compatible with the EU EN 16931 standard under the ViDA Directive. These are machine-readable formats such as the XRechnung or ZUGFeRD standard (version 2.0.1 and higher), or hybrid versions. EDI formats according to the EDIFACT standard are also acceptable.
Regular PDF files without integrated datasets will not be accepted after 1 January 2027. E-documents must still ensure authenticity of origin, integrity of content, and readability.
The introduction of mandatory e-invoicing in Germany marks a fundamental change in tax administration and business communication. Businesses should pay attention to preparing for the new obligations, including the introduction of technical infrastructure for receiving, issuing, and reading e-documents to avoid the risk of tax penalties and possible loss of the right to VAT deduction.
If e-invoicing already concerns you or you are dealing with the need to adapt e-documents to a human-readable format, do not hesitate to contact us.