In future, invoices in the B2B sector will only be issued in electronic form.
In future, invoices in the B2B sector will only be issued in electronic form.
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- The e-bill obligation is coming - the most important facts at a glance
Since the end of the transitional period of the E-Invoicing Act at the latest, public clients and their invoice issuers in Germany have been obliged to issue electronic invoices. With the publication of the Growth Opportunities Act in the Federal Law Gazette on 27 March 2024, the obligation will now also apply to the business-to-business sector on 1 January 2025 (plus any transitional periods).
What is it all about?
Among other things, the Growth Opportunities Act provides for fundamental changes to the Value Added Tax Act. Firstly, a distinction will be made in future between electronic invoices and other invoices.
According to Section 14 of the Value Added Tax Act (UstG), electronic invoices will in future only be invoices that are issued, transmitted and received in a structured electronic format and that enable electronic processing. It is also specified that these electronic invoices must fulfil the European standard EN16931 for electronic invoicing in accordance with Directive 2014/55/EU.
According to the results of DIN CEN/TS 16931-2, the following syntaxes fulfil the requirements of the European standard EN 16931
- Universal Business Language (UBL) 2.1
- UN/CEFACT Cross-Industry-Invoice (CII) according to XML schema 16B (SCRDM - CII)
These requirements are currently met by the electronic invoice standards ZUGFeRD (from version 2.1.1 with XRechnungsprofil) and Xrechnung, among others.
An individual agreement on the format between the invoice issuer and invoice recipient will also be possible in future in accordance with Section 14 UstG, but only if the agreed format enables the complete and correct extraction of the required information in a format that is interoperable with the standard of the directive. If this requirement is met, procedures such as the EDIFACT standard used via Electronic Data Interchange (EDI) can continue to be used.
All other formats and procedures (including the e-mail receipt of PDF files) are categorised as other invoices and may only be used for two applications in future:
- Invoices whose total amount does not exceed 250 euros
- Invoices from the transport of passengers (tickets)
+49 30 2068 2563 AndreasSteffensPhone number
+49 30 2068 2563 AndreasSteffens Phone number
03020681789 PatrickStadlerPhone number
03020681789 PatrickStadler Phone number
What should companies be prepared for?
Many companies have been utilising the benefits of sending and receiving invoices electronically for years. However, this is often done using simple PDF formats that are sent to a central mailbox. However, these invoice formats no longer meet the definition of an electronic invoice in accordance with the amendment to the VAT Act and may therefore only be used for the exceptional cases described above.
The change will therefore lead to a major disruption of existing processes on both the sender and recipient side of invoices.
How much time is left?
The amendments to the VAT Act will enter into force on 1 January 2025 in accordance with Article 35 of the Growth Opportunities Act. However, the law also provides for a corresponding transitional period for the exchange of invoices.
This means that until 31 December 2026, invoices based on a turnover after 31 December 2024 but before 1 January 2027 can continue to be sent in paper or an electronic format that does not comply with the new provisions of Section 14 (1) sentence 6.
This regulation also applies to invoices up to 31 December 2027 that are based on turnover after 31 December 2026 but before 1 January 2028, provided that the total turnover of the company issuing the invoice did not exceed EUR 800,000 in the previous calendar year.
Until 31 December 2027, invoices may also be transmitted by means of electronic data interchange (EDI) in accordance with Article 2 of Recommendation 94/820/EC that do not comply with the new provisions of Section 14 (1) sentence 6, provided that the underlying turnover occurred after 31 December 2025 and before 1 January 2028.
What should companies do now?
In order to comply with the requirements of the VAT Act, it is necessary for companies to analyse their existing invoicing processes, make the necessary adjustments to processes and systems and communicate upcoming changes to suppliers and customers.
For companies that still primarily work with analogue invoice formats, it is now urgently necessary to develop a digitalisation strategy.
KPMG can support you in adapting and creating new digital processes and, as an auditor, determine the robustness and conformity of your processes. Our experts can advise you on questions and support you with the implementation of electronic invoice formats and the adaptation of your processes and internal control system. Get in touch with us.
