Updated on 05/09/2023


This year is certainly proving to be hectic for the electronic invoice, and the major changes taking place have probably not gone unnoticed even by those who are not exactly “insiders.”

For all organizations that do business with suppliers and customers crossborder, it’s absolutely essential to stay up to date on the developments in electronic invoicing and e-reporting that are affecting countries in Europe and beyond.

After years of stalemate during which advances were minimal (or not at all), we are now in a period of great acceleration that is destined to radically change the processes to which we have become accustomed.

We have already had occasion to address the European proposal known as VIDA (VAT in the Digital Age), which is intended to give a strong impetus to introducing mandatory e-invoicing through a series of measures that are expected to be implemented between 2024 and 2028. While the proposal introduces the obligation to use electronic invoices in intra-EU B2B transactions, it also removes some of the bureaucratic hurdles that have held back the adoption of electronic invoices in domestic transactions thus far.

Alongside this European development, we must also mention the various actions that some countries are taking to implement electronic invoicing at the B2B and B2G levels. In France and Spain, which announced this mandate some time ago, this will be introduced gradually between 2024 and 2026. We covered these issues extensively in our article on electronic invoicing in Europe. More recently, Greece has also shared its plan in this regard, which envisions a phased introduction between September 2023 until 2025.

Today, however, we want to focus on the recent developments announced by Germany, a country that has had a particularly fragmented and complex situation. The news is that Germany has been given the green light by the European Commission and has announced its intention to introduce B2B e-invoicing from January 2026, according to the latest updates. The first draft of the proposal, as we previously announced, set the kick-off date for 2025. However, the German government recently released a new version of the proposal, which postpones the mandate until January 2026.


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The announcement by the Ministry of Finance and the launch from 2026

Let’s start at the beginning by summarizing the steps that led to the recent statement announcing the introduction of electronic invoicing in Germany.

The first signs came in November 2022, when Germany applied to the European Commission for the necessary permission to be able to introduce the generalized e-invoicing mandate. This is the procedure under the current rules, which requires that the request be supported by, among other things, appropriate justifications, such as a description of the expected benefits. As we have seen elsewhere, the new ViDA proposal envisions eliminating this step starting in 2024, the year from which it will be easier for member states to introduce electronic invoicing.

After this first step in late 2022, the German Ministry of Finance announced the development of a plan to introduce B2B e-invoicing in Germany in April 2023. The proposal underwent a public consultation, which was attended by various stakeholders and ended on May 8.

The draft shared by the German Ministry contains a number of elements that will need to be confirmed, so it is worth mentioning that both the proposed dates and the specific aspects that will characterize the e-invoicing model are still under discussion and may be subject to change. Below, we will share the main points of this proposal, which are useful to give an idea of the path that Germany is taking.


What the e-invoice obligation in Germany includes 

The drafted proposal contains not one, but two obligations:  

  • The introduction of e-Invoicing for the B2B sphere was first slated to start in 2025, now postponed to 2026; the authorities have not yet determined whether the switch to e-Invoicing will take place for all companies at the same time, or whether the implementation will follow progressive steps, based on company size or revenue  
  • According to the new draft, companies that wish to anticipate the mandate will be able to use electronic invoicing on a voluntary basis, starting from 2025; this means that from the same date, all companies will have to be able to receive electronic invoices
  • Use of EDI will still be allowed, but only until 2028
  • The introduction of an e-Reporting system is deferred for a later date

What clearly emerges is the desire to conform to the more general framework taking shape under the impetus of the European Union and the ViDA proposal, without forgetting the standards and models that are being consolidated. All this is toward promoting interoperability and reducing the impacts as much as possible for companies who will be using the electronic invoice for the first time.

In line with the European ViDA proposal, the German project states that electronic invoices will have to comply with the EN 16391 standard, which establishes the requirements for the European invoice. Currently, the XRechnung and ZUGFerD formats in Germany are both compliant.

The German proposal presents several options for the transmission of electronic invoices and the interaction between suppliers, customers, and tax authorities. This includes a single government platform and private platforms or providers, which can enable the exchange of electronic documents. Among the options being considered are those that move closer to the model that is gaining momentum in France (Y-scheme) or the 5-corner model, which is promoted by OpenPeppol, among others. However, the inclination is to adopt a decentralized model of interaction, as opposed to our centralized SdI system.

Finally, the willingness to implement an e-Reporting system is also shown to be in line with both the ViDA proposal and the approach of several European countries. Remember that various types of e-Reporting models have been in use for some time or are being implemented in numbers of member states, including Spain, Portugal, Hungary, France, and Romania, to name a few. VAT in the Digital Age itself envisions the introduction of an e-Reporting mandate for cross-border operations starting in 2028, leaving it up to member states to implement similar solutions domestically.


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The current situation in Germany

Currently, there is an obligation in Germany regarding B2G invoicing, i.e., between public administrations and their suppliers, which is not yet uniformly adopted. In fact, as we mentioned earlier, the scenario from this point of view is rather fragmented due to the fact that Germany is a federal state and the individual states have freedom of action on this matter.

As of today, the obligation to send electronic invoices to public administrations is in effect for central government suppliers.

As for individual regions and their public administrations, the situation is varied: some states have already implemented the mandate (e.g., Bremen, Hamburg, and Saarland), while others will implement it starting in 2024, such as Hesse and Rhineland-Palatinate. Still other regions plan to use e-invoicing but have not yet defined a mandatory requirement.

There are mainly two formats for issuing structured electronic invoices in Germany, namely XRechnung and ZUGFerD, which are used in the context of B2G transactions in particular.

Regarding the platforms and transmission methods that can be used to send electronic invoices to German administrations, the situation is very heterogeneous. In fact, there are currently several platforms in existence. Depending on whether the organization is a central administration or an entity in a federal region, it is necessary to identify which platform and transmission method to use from time to time.


What to expect for the future? 

Given the situation we have just described, the German project is certainly ambitious, especially given the date January 1, 2026, which is not that far off.

However, at the same time, it represents an opportunity to introduce greater standardization in a currently complex landscape. Also, we cannot forget the other benefits that electronic invoicing is able of bringing to businesses and public administrations, in terms of:

  • Efficiency and rationalization of processes 
  • Cost savings 
  • Reduced payment times 
  • Environmental sustainability and reduced carbon footprint 

All that remains is to wait for the next developments to be determined by the German government in order to understand which model will be implemented for adopting electronic invoicing in Germany, the technological solutions that will be in place, and, last but not least, the timetable for the next requirements.