On November 17, 2023, the German Bundestag approved the Development Opportunities Act (Wachstumschancengesetz), which included mandatory regulations regarding B2B electronic invoices. This act comprised several amendments compared to the initially proposed version.

In the coming weeks, the Bundesrat will vote on the law, aiming to finalize it by the end of 2023. Familiarize yourself with the latest proposals currently under consideration in parliamentary votes.

The latest proposals regarding VAT and electronic invoices in Germany.

Change in the definition of electronic invoices

During parliamentary votes, there may be a change in the definition of electronic invoices and the categorization of paper invoices.

Votes tend towards introducing a requirement for electronic invoices (e-invoices) to comply with the EN16931 standard or another data format agreed upon between the supplier and the buyer. This format must enable the correct and comprehensive extraction of the required VAT information from the electronic invoice to a format compliant with the EN standard.

The second part of this specific proposal concerns paper invoices. The proposal suggests that the categorization of paper invoices will be treated as other invoices.

New mandatory dates and procedures for electronic invoices

If the current parliamentary votes are approved, all scenarios of business invoices (B2B) must adhere to the following dates and procedures:

From January 1, 2025 – All companies should be capable of receiving electronic invoices in the EN16931 format, as buyer consent will no longer be required for sending electronic invoices. Until December 31, 2026 (previously December 31, 2025) – Paper invoices and electronic invoices in formats not compliant with EN16931 are still allowed but can only be sent with the recipient’s consent. From January 1, 2027 (previously January 1, 2026) – Obligation to issue B2B electronic invoices for companies with a turnover for the previous year (2026) of 800,000 euros or more. In addition to a one-year extension of this previously proposed mandate, another amendment stipulates that companies can continue to use EDI beyond this date. From January 1, 2028 (previously January 1, 2027) – Obligation to issue B2B electronic invoices for all companies. The use of EDI is still allowed, provided that VAT information can be extracted in the EN16931 format.

EDI Status

The business sector has expressed concerns about the costly adaptation of Electronic Data Interchange (EDI) to the EN16931 standard.

A new provision, if adopted, will allow mutual agreement between invoice issuers and recipients to use a different structural electronic format, provided that it accurately extracts essential VAT-related information.

History of e-invoice regulations in Germany

Germany, like many other European Union member states, currently has mandatory electronic invoices in business-to-government (B2G) relationships. All public authorities must be able to receive electronic invoices, and all suppliers to public authorities must send electronic invoices to their government counterparts.

The first indication of Germany’s intention to introduce mandatory B2B electronic invoices was on June 23, 2023, when the European Commission granted the country permission to deviate from certain parts of the European VAT directive.

Germany’s plan aligns with the VAT directive in the Digital Era, which also encourages many EU member states to address their intentions regarding e-invoice regulations.