The requirements for an e-invoice include various aspects that are intended to ensure both legal compliance and practical functionality. They are based on some fundamental principles that also apply to traditional paper invoices. In Germany, for example, e-invoices must contain certain mandatory information in accordance with the Value Added Tax Act. They must also have an electronic format that guarantees the authenticity of the origin, the integrity of the content and the legibility of the invoice. There are different formats for this in Germany that meet the EN-16931 standard and therefore offer a standardized structure for electronic invoicing. Furthermore, companies must guarantee that their e-invoicing processes comply with the statutory retention obligations and that invoices can be stored digitally for the prescribed period.
In addition, these requirements must be complied with for the entire duration of the retention periods of 6 or 10 years, as stipulated in Section 147 (3) of the German Fiscal Code (AO) (to be found under Chapter 3, point 27 of the GoBD guidelines). What do these requirements look like? We explain briefly:
1. a must for all companies: Electronic invoicing will be mandatory from 2025
From January 1, 2025, e-invoicing will become mandatory in the B2B sector. The new Growth Opportunities Act enshrines this change in order to completely digitize invoice processing. Until now, all contractors or suppliers were obliged to create e-invoices for amounts of 1,000 euros or more if they work for a public client. With the changeover, all B2B companies will in future be required to issue invoices in a structured, digital format. According to the e-invoicing regulation, typical formats for this are, for example, ZUGFeRD and XRechnung, which comply with the new legal standards in accordance with DIN EN 16931 and require more comprehensive mandatory information than conventional invoices. It will only become clear which format or formats will prevail once e-invoicing becomes mandatory and the proportion of e-invoices increases.
Companies will be supported by transition periods to adapt to the digital innovations and adapt their company-specific processes. However, this law is not only an obligation, but also an opportunity to increase efficiency in the digital business landscape.
2 The road to e-billing: What does the change mean for companies?
make the necessary preparations by the end of 2024 to be able to receive electronic invoices from 2025 and issue them from 2026. While larger companies should start adapting their systems now, smaller companies with a turnover of up to 800,000 euros have until the end of 2027 to complete the changeover.
2025:
- Obligation to issue electronic invoices in structured electronic formats that enable automated electronic processing.
- A PDF invoice sent by e-mail is no longer considered an electronic invoice.
2026-2027:
- Transition phase in which certain exceptions are permitted, such as the continued use of paper invoices under certain conditions.
2026:
- Electronic invoices that do not comply with the new format requirements may be submitted until the end of 2026.
- Paper invoices with B2B sales from the years 2025-2026 may also be transmitted until the end of 2026.
2027:
- Electronic invoices that do not comply with the new format requirements will remain permissible until the end of 2027; the invoice recipient must give their consent; the invoice issuer's previous year's turnover must not exceed €800,000.
- Paper invoices with B2B sales from 2027 may be transmitted until the end of 2027.
2028:
- Complete and binding implementation of the requirements for e-billing
3. a smooth changeover to e-invoices: What is there to consider?
- Analyze the status quo: It is important to look at how many paper invoices are currently still being used on a daily basis.
- Check technical requirements: You should also make sure that the accounting software supports the new formats.
- Recognize the need for action: Different requirements, such as new portal connections and software solutions, can arise during the changeover to e-invoicing. The earlier these are identified, the better.
- Communication is key: customers, suppliers and colleagues should be informed about the changeover. Early communication can prevent many problems later on.
- Provide digital archiving: E-invoices must be archived digitally and in an audit-proof manner. A digital archive helps to comply with legal requirements and to be able to access old invoices quickly.
- Offer training: The entire team should know how to handle e-invoices. Training can be very helpful here and should be offered within the company.
4 What are the mandatory details for e-invoices?
Specific legal requirements apply to electronic invoices in many countries, although these can differ from region to region. In principle, however, e-invoices must contain the same mandatory information as paper invoices. Here is an overview of the general requirements for mandatory information on e-invoices, as is customary in the EU:
- Name and address of the invoicing party: The company or person issuing the invoice must be clearly identifiable.
- Name and address of the invoice recipient: It must also be possible to clearly identify the recipient.
- Tax number or VAT identification number: These numbers are important to confirm the tax registration of the invoice issuer.
- Invoice date: The date on which the invoice was issued.
- Delivery date or service period: The date or period in which the goods were delivered or services were provided.
- Quantity and type of goods delivered Scope of services rendered: A precise description of what has been delivered or performed.
- Unit price and any discounts or surcharges: The unit price and information on discounts or surcharges, if applicable.
- VAT rate and VAT amount: The applicable tax rate and the resulting tax amount, if VAT is charged.
- Total amount of the invoice: The final amount that the invoice recipient must pay.
- Consecutive invoice number: A specific number that is assigned to each invoice to identify it uniquely.
- Routing identification number: This number uniquely identifies the invoice recipient. Invoice senders receive the routing ID from their client.
In addition, e-invoices must ensure that the data cannot be manipulated during transmission and storage. This often requires the use of technologies such as electronic signatures or electronic data interchange (EDI) formats that guarantee the authenticity and integrity of the invoice. In the EU, the formatting of e-invoices sent to contracting authorities must comply with the EN 16931 standard, which prescribes a standardized format for electronic invoicing.
5. is a PDF an e-invoice?
A regular PDF file alone is not considered an e-invoice within the meaning of the strict regulations for electronic invoices. A genuine e-invoice must be created, transmitted and received in a structured electronic format that enables automatic electronic processing. A simple PDF can only meet these requirements if it also contains embedded structured data such as in the ZUGFeRD format. From 2025, however, only electronic formats that fully comply with a standardized structure and are machine-readable will be recognized as e-invoices.
PDFs will therefore be classified as "other invoices" in the same way as paper invoices in future and will be completely replaced by B2B e-invoices by 2028.
6. what standard format must an e-invoice have within the meaning of the e-invoicing regulation?
Electronic invoice formats are standardized formats that enable the automated exchange of invoice data between different systems. The most popular e-invoicing formats in Germany, which meet the requirements of EN 16931-compliant e-invoicing, include
- XRechnung: Specially developed for public administration in Germany, XRechnung is a standardized format for electronic invoicing. It meets the requirements of the EU standard for electronic invoicing. It is a machine-readable, structured XML data record.
- ZUGFeRD: A hybrid format that is popular in Germany and contains both machine-readable XML data and a PDF/A-3 document so that the invoice can be processed both visually and by machine. The format was established specifically because XRechnungen are not easy for humans to read. ZUGFeRD is a PDF file into which an invisible XML file has been integrated. In contrast to XRechnung, this format can be adapted to company-specific designs.
These two formats support different aspects of e-invoicing, such as regulatory compliance, automation of invoice processing and reduction of errors. Companies often choose a format based on their specific requirements, technical compatibility and the requirements of their trading partners.
It is likely that these two already established formats will prevail with the introduction of mandatory e-invoicing. However, other popular and new formats may also be developed that meet the specific requirements of individual sectors, provided they comply with EN 16931. Companies will face the challenge of integrating various legally compliant formats into their processes and software, particularly with regard to automation processes.
7 How do I receive an e-bill?
E-invoices can be received in various ways. Companies that want to receive e-invoices often have to make technical adjustments, such as setting up special e-mail inboxes or connecting to electronic data interchange (EDI) systems. Many smaller companies also use invoice management software that supports the receipt and processing of e-invoices. It is important that the formats received comply with legal requirements so that they can be legally used as incoming invoices for input tax deduction and accounting purposes.
8. how to create an e-invoice?
The creation of an electronic invoice can be roughly divided into two methods, with the use of online accounting software often considered the simplest and most secure method. Here are the essential steps and information needed for e-invoicing to create a correct e-invoice:
Steps for creating an e-invoice:
- Choice of format:
✓ XRechnung
✓ ZUGFeRD
✓ Other valid formats - Choice of creation method:
✓ Online generator: Especially intended for individual users or small companies that do not have their own accounting program. Special websites offer the option of generating e-invoices directly online.
✓ Accounting software: Larger providers offer integrated functions for creating e-invoices, which simplifies the process and offers additional benefits such as automatic archiving and direct posting. - Important information for an e-invoice:
✓ Names and addresses of the client and contractor.
✓ Tax number or VAT identification number.
✓ Date of issue of the invoice.
✓ Routing ID of the invoice recipient for unique electronic addressing.
✓ Supplier number, if specified by the client.
9. what are the advantages of using e-invoices?
The digitalization of financial processes is a high priority for many companies, as these changes enable them to optimize their workflows and remain competitive thanks to the associated cost savings. E-invoicing definitely plays a key role in this transformation. This form of invoicing not only offers more efficient processing, but also brings numerous other benefits. As part of the Growth Opportunities Act, which aims to promote research and innovation in German companies, e-invoicing plays an elementary role in reducing bureaucratic hurdles and promoting digital processes.
The most important advantages of e-invoicing are summarized here:
- Reduction of administrative workload: e-invoices reduce the time and workload associated with the administration of traditional paper invoices.
- Cost savings: Eliminates the need for printing and shipping, resulting in direct savings.
- Faster processing: The electronic processing of invoices enables faster processing, which can lead to faster incoming payments.
- Improved accuracy: Automated processes reduce errors that can occur during manual data processing.
- Efficient archiving: e-invoices make archiving easier. As they can be stored centrally in one place, this leads to a better overview and faster access to the required data.
10. e-invoices: Retention obligations and audit-proof archiving with a DMS
In Germany, e-invoices must be stored
for ten years in accordance with VAT regulations. It is important to note that electronic invoices must be archived in the format in which they were created and received in order to ensure the integrity and authenticity of the data. Companies must ensure that the archived invoices can be made readable at any time within a reasonable period of time. This is not only for tax law purposes, but also for verifiability by the tax office.
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