E-invoicing obligation about to be introduced?

Background

The EU plans to allow member states to introduce the obligation to issue invoices electronically from 2024 (we reported earlier). From 2028 onwards, invoices will generally be issued electronically, with a few exceptions. The BMF has now published the draft of the so-called “Growth Opportunities Act”, which reveals first details on the content and timing of the implementation of the e-invoicing obligation.

What is planned?

As of 1.1.2025, an electronic invoice (e-invoice) is defined as an invoice that is issued, transmitted and received in a structured electronic format that enables electronic processing. Furthermore, the invoice must comply with the requirements of Directive 2014/55/EU (CEN format EN 16931). Invoices that do not meet these requirements (paper, pdf invoices) are considered "other invoices". The obligation to issue invoices electronically only applies to domestic transactions between companies (B2B).

Are there any exceptions or transitional arrangements?

Exceptions are provided for small-value invoices and travel tickets. Here, other invoice formats continue to be permitted for domestic B2B sales. It also provides for the following transitional arrangements:

• Until 31.12.2025, instead of an e-invoice, also an “other invoice” can be issued in paper or another electronic format. 
• The e-invoice obligation will then apply from 1.1.2026 at the latest. Until 31.12.2027, the e-invoice can then still be issued in a format other than according to CEN standard 16931. 

Is implementation actually to be expected?

Currently, the e-invoicing obligation still violates the VAT Directive, but this is to be changed as of 2024 as part of the "VAT in the Digital Age" initiative (ViDA). Regardless of whether and when the EU implements its plans, Germany has now been authorized by the EU to introduce the e-invoicing obligation (cf.: EU Council, Implementing Decision of 25.7.2023). Implementation thus depends solely on the progress of the legislative process.

Consequences for foreign companies

According to the draft law, the mandatory e-invoice only applies if the supplying party and the recipient are domiciled in Germany. One is domiciled in Germany if he has his registered office, his place of management, a permanent establishment involved in the transaction or, in the absence of a registered office, his domicile or habitual residence in Germany.

Thus only domestic taxpayers are affected by the obligation. Foreign companies that do not have a fixed establishment in Germany are therefore not affected for the time being. In particular, an intra-Community supply of goods to Germany or any other service performed from a foreign company in Germany does not lead to the mandatory e-invoice.

However, we will provide information here on the further progress of the legislative process.