E-Invoicing Obligation 2025 in Germany: What You Need to Know

The E-Invoicing Revolution Has Begun

The Wachstumschancengesetz (Growth Opportunities Act) has made electronic invoicing mandatory for B2B transactions in Germany. Since January 1, 2025, all businesses must be capable of receiving e-invoices. This is not a future plan or a proposal. It is the law.

The country joins a growing list of European nations mandating structured electronic invoicing. But the approach here is unique in its phased rollout, giving businesses time to adapt while establishing clear deadlines that cannot be ignored.

This article covers everything you need to know: the legal basis, the exact timeline, which formats are recognized, who is affected, and how to ensure your business is compliant.

What Is an E-Invoice Under the Law?

Under the Wachstumschancengesetz, an e-invoice (E-Rechnung) is a structured electronic document that can be processed by machines automatically. This is a critical distinction.

A PDF sent by email is NOT an e-invoice. While a PDF is digital, it is essentially a picture of an invoice. It cannot be automatically read, validated, or processed by accounting software without manual intervention or OCR technology.

A valid e-invoice must comply with the European standard EN 16931 and contain structured data in a machine-readable format such as XML.

Recognized E-Invoice Formats

XRechnung

XRechnung is the national standard for structured e-invoices, built on the European EN 16931 norm. It is a pure XML format without any visual representation. XRechnung has been mandatory for invoices to federal government agencies since 2020 and is now extending to the B2B sector. It is the format preferred by public authorities and increasingly adopted in the private sector.

ZUGFeRD 2.x

ZUGFeRD (Zentraler User Guide des Forums elektronische Rechnung Deutschland) is a hybrid format that combines a human-readable PDF with an embedded XML file. Version 2.x is EN 16931-compliant and legally recognized. ZUGFeRD is popular because it allows both humans and machines to read the same document, making the transition from PDF-based workflows smoother.

Peppol BIS Billing 3.0

While Peppol is primarily a transmission network rather than a format, invoices sent via Peppol use the UBL or CII format, both of which are EN 16931-compliant. Peppol provides a secure, standardized way to exchange e-invoices across Europe and is gaining significant traction locally. With Peppol Box, connecting to this network takes just a few minutes.

The Complete Timeline

The mandate follows a phased approach:

• January 1, 2025: All B2B businesses must be able to receive e-invoices. This applies to every company, regardless of size.
• Until December 31, 2026: Businesses may still send invoices as PDF or paper with the recipient's consent.
• January 1, 2027: Businesses with annual revenue exceeding 800,000 EUR must send e-invoices.
• January 1, 2028: All businesses must send e-invoices for domestic B2B transactions, regardless of revenue.

Who Is Affected?

Businesses Subject to the Mandate

• All VAT-registered businesses (umsatzsteuerpflichtige Unternehmen) based in the country
• Self-employed professionals and freelancers (Freiberufler)
• Small and medium-sized enterprises (KMU) and trade businesses (Handwerksbetriebe)
• Large corporations and enterprises

Exemptions

• Invoices to private individuals (B2C transactions)
• Cross-border transactions (initially excluded, EU harmonization expected later)
• Small businesses under Section 19 UStG (Kleinunternehmerregelung) - exempt from sending only
• Tax-exempt transactions under Section 4 Nr. 8-29 UStG
• Invoices below 250 EUR (simplified invoices) are not required in structured format during the transition

Practical Steps to Comply

Step 1: Ensure You Can Receive E-Invoices

This is the immediate requirement. You need a system that can receive, read, and store XRechnung and ZUGFeRD files. A dedicated e-invoicing platform like Peppol Box handles this automatically and provides a simple inbox for all your incoming invoices.

Step 2: Set Up Compliant Archiving

Under German tax law, e-invoices must be archived in their original electronic format. Printing an e-invoice and filing the paper copy is not compliant. Peppol Box stores your invoices securely with encryption in Europe.

Step 3: Prepare for Sending

Even though the sending obligation does not apply to all businesses until 2028, early adoption provides significant benefits: faster payment cycles, fewer errors, reduced administrative costs, and a competitive advantage with larger clients who already expect e-invoices.

Step 4: Inform Your Accountant

Coordinate with your tax advisor on how e-invoices will be shared. Tools like Flexina Sync automate this process entirely, delivering your invoices to your accountant in their preferred format.

Penalties for Non-Compliance

While the authorities have indicated a pragmatic approach during the transition period, non-compliance carries real risks:

• Fines of up to 5,000 EUR for violations
• Rejected VAT deductions if invoices do not meet format requirements
• Issues during tax audits if archiving does not meet regulatory requirements
• Business disruption if trading partners require e-invoices and you cannot provide them

How Peppol Box Makes Compliance Easy

Peppol Box is designed to make the transition to e-invoicing as smooth as possible for domestic businesses:

• Instant readiness: Receive e-invoices in all EN 16931-compliant formats from day one
• Accountant integration: With Flexina Sync, your accountant automatically retrieves your invoices from Peppol Box — free of charge
• Quick setup: Activate your Peppol ID in just 2 minutes, no technical expertise required
• Secure European hosting: Encrypted data storage in Europe, GDPR-compliant
• Send and receive: Be ready for 2027/2028 sending obligations ahead of schedule
• Affordable pricing: Starting from €5/month

Frequently Asked Questions

Do I need to send e-invoices starting in 2025?

No, the 2025 obligation is for receiving only. Sending obligations begin in 2027 for larger businesses and 2028 for all others.

Is Peppol mandatory?

No, Peppol is a transmission network, not a mandated format. However, it is the most practical and widely adopted way to exchange e-invoices across Europe.

What happens if I am not prepared?

Without the ability to receive e-invoices, you risk losing VAT deductions, facing fines of up to 5,000 EUR, and creating friction with your business partners.