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News from the German Federal Ministry of Finance regarding mandatory e-invoicing for domestic B2B transactions
GermanyOn 2 October, the German Federal Ministry of Finance (BMF) provided more clarity with respect to the introduction of mandatory e-invoicing as part of the Growth Opportunities Act.
More information regarding the definition of e-invoices and how exactly the system will be introduced can be found in our September and July alerts.
The BMF has clarified that the already established systems XStandard and ZUGFeRD (from version 2.0.1) meet the requirements of the European standard for electronic invoicing (Directive 2014/55/EU) and can therefore be used as part of mandatory B2B e-invoicing as well.
Section 14.4 of the Administrative Guidelines to the German VAT Act (UStAE) regarding hybrid invoices will be amended. Once e-invoicing is mandatory for B2B transactions, the part of the invoice that can be read by the human eye will no longer be determinative. It will be the electronically structured part, which first requires conversion to be readable, that will be considered to assess the validity of the invoice.
Furthermore, the BMF makes clear that, from 1 January 2025, German businesses cannot refuse electronic invoices sent by other German businesses. Conversely, this means that although not all German businesses have to send e-invoices during the transition period (2025-2028), they must be capable of receiving them.
Key takeaway
Businesses must act promptly and upgrade their billing systems and internal processes to be able to use e-invoices. This urgency is reinforced by the fact that businesses must be able to receive e-invoices from 1 January 2025.
Readers who are interested to know more about the Growth Opportunities Act and upcoming changes in German VAT law may read our more detailed article on the Growth Opportunities Act
ViDA, that is the EU project for VAT in the Digital Age, aims to introduce mandatory e-invoicing for B2B cross border supplies across the EU . The date for implementation was recently postponed by the EU Parliament to 2029 or later.
