Germany's e-invoicing mandate: deadlines, formats, and next steps

If you do business in Germany, this affects you: since January 1, 2025, an e-invoicing mandate applies to transactions between businesses based in Germany. It rests on the Wachstumschancengesetz (Growth Opportunities Act), which anchored the new rules in Section 14 of the Umsatzsteuergesetz (UStG), the German VAT Act. The mandate arrives in stages: part of it already applies today, further stages follow in 2027 and 2028.

This guide explains in plain language what an e-invoice is, who is affected, and which deadlines apply. By the end you will know which steps are ahead for your business. All information reflects the situation as of July 2026.

What is an e-invoice, and what is not?

An e-invoice is an invoice in a structured data format. Structured means the invoice data exists as a machine-readable data record, in practice as an XML file. XML is a text format in which every piece of information has a fixed field. Software can read the amount, the tax rate, and the invoice number directly. Nobody has to retype numbers.

Important: a plain PDF is not an e-invoice. Neither is a scanned paper document. Since 2025, both count only as a so-called other invoice (sonstige Rechnung). The reason: a PDF is an image of the invoice for the human eye. The data behind it cannot be read reliably by software.

The benchmark for e-invoices is the European standard EN 16931. It defines which information an e-invoice must contain and how the data must be structured. In Germany, two formats in particular meet this standard: XRechnung and ZUGFeRD. Both are introduced later in this guide.

Who is affected, and who is not?

The mandate applies to domestic B2B transactions. B2B means a transaction between two businesses. Domestic means both businesses are established in Germany. Invoices to private customers (B2C) are not affected. There, everything stays as it was.

Some cases are exempt from issuing e-invoices: small-value invoices up to 250 euros gross (Section 33 UStDV, the German VAT implementing regulation), travel tickets, and certain tax-exempt transactions. Small businesses under Section 19 UStG (the German Kleinunternehmer scheme) are permanently exempt from issuing thanks to the Annual Tax Act 2024 (Jahressteuergesetz). They may continue to write paper or PDF invoices.

One obligation, however, applies to all businesses without exception, including small businesses and one-person operations: the obligation to receive. Since January 1, 2025, you must be able to accept e-invoices. According to the FAQ of the German Federal Ministry of Finance, an email inbox is sufficient for this. You may not refuse an e-invoice from a domestic business partner.

The deadlines at a glance

The legislator has granted transition periods for issuing. What matters is the total turnover of the invoice issuer in the previous calendar year. The recipient's turnover and the amount of the individual invoice are irrelevant.

A business that is obliged to issue e-invoices but does not do so fails to meet its VAT obligations. For the recipient, the input VAT deduction can then become a problem, that is, the refund of paid VAT by the tax office. It therefore pays for both sides not to postpone the switch.

XRechnung and ZUGFeRD: the two formats

XRechnung, the German standard for structured e-invoices, is a pure XML format and the standard of the German public administration. It is maintained by the Koordinierungsstelle für IT-Standards (KoSIT), the German coordination office for IT standards. If you invoice public authorities, XRechnung has been required in many places since late 2020. For this you usually need a Leitweg-ID, a kind of routing identifier of the respective authority that must be stated on the invoice.

ZUGFeRD is a hybrid format: a PDF file for reading, with the same invoice data embedded as XML. The advantage: your customer sees the familiar invoice while their software reads the structured data. ZUGFeRD is recognized as an e-invoice from version 2.0.1. Watch out for the so-called profiles, the expansion levels of the format: the smallest profiles MINIMUM and BASIC-WL do not meet the legal requirements.

Both formats are based on the EN 16931 standard and are equivalent for domestic B2B invoices. In everyday business, ZUGFeRD is often convenient because the readable PDF is preserved. Public authorities, on the other hand, usually require XRechnung. Good software generates both from the same invoice data.

Concrete steps for small businesses

You do not need a project team for the switch. The following steps can be worked through one after another and create a solid foundation.

• Ensure you can receive: designate an email inbox for incoming invoices and share it with your suppliers.
• Make e-invoices readable: use software that can display and extract XML invoices. Raw XML is hard to read without tools.
• Clarify archiving: the structured part of the e-invoice, meaning the XML file, is the original. It must be kept unchanged for 8 years (Section 14b UStG). A paper printout is not enough.
• Plan your own invoicing: check when you must start issuing. If your turnover in 2026 was above 800,000 euros, the obligation applies from 2027, otherwise from 2028. Choose software in good time that generates XRechnung and ZUGFeRD.
• Maintain master data: store your tax number or VAT identification number (USt-IdNr.) as well as your customers' VAT IDs and, where applicable, their Leitweg-ID.
• Involve your tax advisor and customers: clarify which format your largest customers prefer and how documents are handed over to the tax firm.