Germany: B2B E-Invoicing Updates

On 15 October 2024, Germany’s Ministry of Finance (BMF) published the final version of the official guidance concerning the issuance of invoices under Section 14 of the German VAT Act (UStG).

This guidance clarifies the implementation of mandatory electronic invoicing (eInvoicing) for transactions between domestic entrepreneurs, which will be effective from 1 January 2025.

The final version includes several additions and clarifications compared to the draft guidance published on 14 June 2024.

Some notable points in the guidance include:

• Scope of Reporting Taxpayers and Supplies:
  • The guidance confirms the groups of taxpayers and situations where the eInvoicing obligation applies.
    • eInvoicing is not required for non-established businesses or certain tax-exempt transactions.
  • Invoices of low value (currently below EUR 250) and travel tickets are exempt from the eInvoicing requirement.

• Transmission Methods:
  • The guidance confirms the methods of transmitting eInvoices, specifying several acceptable options:
    • Email transmission
    • Transmission via an electronic interface
    • Shared access to a central storage location within a group of companies
    • The option to download invoices via an internet portal

Contractual agreement: The method of transmission must be agreed upon between the contracting parties under civil law

• Human Readability:
  • There is no requirement for the human readability of the eInvoice, meaning the invoice does not need to be legible for people who may view it in its raw data format, as long as it complies with technical and legal requirements.

• Use of Business Identification Number (W-IdNr.):
  • If a German Tax Identification Number (Steuernummer) is unavailable, the Business Identification Number (Wirtschafts-Identifikationsnummer – W-IdNr.) can be used on the eInvoice instead.

• Minor Deviations Permitted:
  • Small discrepancies between the eInvoice and the “regular” invoice (e.g., a PDF invoice) are permissible as long as they do not significantly affect the content. For example, item descriptions may differ slightly between the human-readable version and the eInvoice.

• Credit Notes and “Other Invoices”:
  • Credit notes can still be issued as “other invoices” if they address invoices outside the eInvoicing system. This means that regular invoices can be corrected by a credit note in the same format
  • eInvoice credit notes will be mandatory for eInvoices starting in 2025, but regular invoices issued before then can still be corrected with non-electronic credit notes, up until 2028, which is the transition period for full implementation.

• Advance Payments:
  • For transactions involving advance payments, the VAT can be deducted as usual when the final invoice is issued, even if part of the payment has already been made.
  • If a separate eInvoice is issued to cover the remaining balance, it will need to comply with the eInvoicing requirements starting 1 January 2025. However, if technical limitations persist, a regular invoice can be issued for these remaining payments until 31 December 2027

• Special Cases (e.g., Tax Advisor Contracts):
  • In cases involving rental, maintenance, or lump-sum contracts with a tax advisor, a single initial eInvoice is sufficient. Any subsequent changes to the contract also require an eInvoice.
  • This is based on Article 14.5(17) of the UStAE, which permits payment receipts to serve as proof of service instead of invoices.

These rules will apply starting 1 January 2025, with transitional periods for certain cases extending until 31 December 2027.

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