E-invoicing requirement 2025/2026: What companies need to know

Since January 1, 2025, new rules for e-invoicing in the B2B sector have been in effect in Germany. Companies must be able to receive e-invoices; Transitional regulations apply to the exhibition. According to the BMF FAQ as of March 2026, invoice issuers can still use other invoices for many transactions until December 31, 2026. From 2027, further graduated transition rules will apply before e-invoicing becomes the norm in the domestic B2B sector.

The e-invoicing requirement is therefore not just a tax or accounting issue. It also affects digital processes, interfaces, archiving, invoice data, ERP systems, shops and workflows between website, CRM, accounting and payment processing. Companies should check whether they can process structured formats such as XRechnung or ZUGFeRD and how invoice data will flow securely, comprehensibly and without manual media breaks in the future.

Why is e-invoicing being introduced?

The mandatory introduction of e-invoicing follows the example of numerous EU member states and some countries outside the EU that have already established electronic invoicing as a standard. The aim of this measure is to make the exchange of invoice data more efficient and to prepare for a planned introduction of an EU-wide electronic reporting system for VAT as part of the European Commission’s ViDA initiative. While the implementation of this system was planned by 2028, a postponement until 2030 or 2032 is now being discussed. In Germany, a national reporting system will only be put into operation after the EU-wide solution has been implemented.

New regulations: What companies can expect

From the deadline 1. January 2025 there will only be two categories of invoices: electronic invoices (e-invoices) and other invoices. This distinction is essential for compliance with the new requirements.

E-invoice:

An e-invoice is defined as a document that is issued and processed in a structured, machine-readable format in accordance with the European standard EN 16931. Formats such as XRechnung or the hybrid ZUGFeR format meet these requirements because they contain both machine-readable and human-readable elements. Formats such as PDF, .jpeg or .docx, which do not enable structured data processing, are no longer considered e-invoices.

Other invoice:

This includes all paper invoices and unstructured formats such as PDF or image files. These formats will no longer be recognized as electronic invoices from 2025.

Who is affected by the regulation? 

The e-invoicing requirement applies to all B2B sales within Germany, regardless of whether the company operates full-time or part-time. Small businesses also have to adapt to the new regulations by 2028. The prerequisite for the obligation is that both the provider and the recipient are resident in Germany. A simple VAT registration without domestic residency does not create an obligation to use e-invoicing. 

Exception

Sales with private end consumers (B2C) and cross-border B2B transactions are excluded from this regulation.

Transition periods and implementation steps

The implementation takes place in several phases to give companies enough time to adapt:

• 2025-2026: Companies are still allowed to issue paper invoices and electronic invoices in non-compliant formats (such as PDF), provided the recipient agrees.
• 2027: For companies with an annual turnover of less than €800,000, the use of non-compliant formats remains possible.
• From 2028: The issuing of e-invoices will be mandatory for all B2B sales. Non-compliant invoice formats are then no longer permitted.

Consequences of non-compliance

Companies that do not adhere to the deadlines for switching to e-invoices can face various sanctions:

• Fines: Violations of the e-invoicing requirement can be classified as administrative offenses that are punishable with fines.
• Delayed Payment: Invoices that are not submitted in the required formats may be rejected by the invoice recipients, which may result in delays in payment processing.
• Legal disputes: Non-compliance can also lead to legal disputes, especially if contractual partners insist on compliance with legal regulations.

 

Invoice receipt requirements

From 2025, companies will need to ensure they are able to receive and process e-invoices. Recipient consent is no longer necessary, unless non-compliant invoice formats are involved. However, consent to the use of electronic formats remains required for end users.

Possible transmission channels for e-invoices

Companies can organize the sending and receiving of invoices in various ways. This includes:

• Sending by email
• Use of electronic interfaces
• Deployment in a central location
• Download options via internet portals

Companies also have the option of engaging external service providers to transmit and process e-invoices, but must ensure that all legal requirements are met. Particular attention must be paid to security: The increased receipt of file attachments via email increases the risk of cyber attacks, which is why checking the attachments for malware is essential.

Exceptions and archiving obligations

An e-invoice is not required in all cases. Invoices for small amounts up to €250 and tickets are exempt from this obligation. Electronic invoicing is also not mandatory for tax-free services in accordance with Section 4 UStG. The retention periods remain unchanged at ten years. It is important that the e-invoices are archived in the original, structured format and meet the requirements for immutability. Even if there is also a readable PDF document, the original format must be saved.

Recommended programs and tools

To make the transition to e-invoicing easier, the following programs and services can be used.

• XRechnung tools: Software solutions that are specifically designed for the creation and processing of XRechnung, such as DATEV or Lexware, offer support in complying with the EN 16931 standard.
• Cloud-based invoice services: Providers such as Zoho Invoice or FreshBooks enable the creation, sending and management of e-invoices via online platforms.
• ERP systems: Large ERP systems such as SAP or Microsoft Dynamics offer integrated solutions for handling e-invoices and their compliance.

Conclusion

The mandatory introduction of e-invoicing from 2025 represents a significant change for business transactions in Germany. Companies should prepare in good time to meet the new requirements and benefit from the advantages of efficient processes and improved data processing.