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The electronic invoice – compulsory in the B2B segment as of 2025?

Since 2020, German companies have been required to send all invoices for public contracts electronically as e-invoices. In future, all companies in Germany should only issue electronic invoices to each other in a structured data format.

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The German government is planning to make electronic invoicing mandatory in the B2B sector. As of 1 January 2025, domestic companies will only be able to receive and process electronic invoices in structured e-invoice formats, according to Haufe Verlag (DE) with reference to the German Federal Ministry of Finance (BMF). In all likelihood, anyway, since it is only a draft law at this point. 

Background: The Growth Opportunities Act

As part of the draft of the new Growth Opportunities Act, the term “e-invoice” has been redefined through changes to Section 14 of the Value Added Tax Act. The definition will later read as follows: 

An electronic invoice is an invoice that is issued, transmitted and received in a structured electronic format and enables electronic processing (DE, PDF, P. 60).

ZUGFeRD or XRechnung – that is the question here 

What does this mean for most companies that use easy invoice for invoice processing? You can say goodbye to legacy OCR-based invoice processing methods. These procedures are based on unstructured invoice formats. The structured alternatives to this are called ZUGFeRD or XRechnung. The good news: easy invoice can already handle both. Plus, there are benefits associated with e-invoicing:  

  • Lower expenses for daily invoice processing 
  • Greater transparency and a lower error rate 
  • Automation: Creation of payment records takes place without errors 
  • Greater efficiency thanks to a simpler process for automated booking 

Electronic invoices – what do I have to consider? 

You already use easy invoice, but you want to be prepared and switch to e-invoicing in 2025 and you still have questions? Contact us. 

Contact us now

What is an electronic invoice (e-invoice)? 

The essential feature of an e-invoice is that the actual invoice data is contained in a structured XML format. Without getting lost in details at this point, an XML-based invoice ensures the necessary machine readability. Two formats have become established over the past decade.  

  • XRechnung is one of the open, vendor-independent invoice formats. With Xrechnung, the invoice information is provided as an XML file. The presentation of the information is then left to the invoice processing application. The invoicing standard is developed by the Coordination Office for IT Standards (KoSIT, DE). 
  • ZUGFeRD: As of version 2.0.1, this invoice format now also counts as an e-invoice. It is also XML-based and vendor-independent. The advantage: The XML data is embedded in a PDF. In other words, ZUGFeRD visualizes the information for the user while at the same time supplying the machine-readable invoice data for the processing application. This format is developed by the Forum for Electronic Invoicing Germany (FeRD). 

Now, which of these standards is suitable for you is certainly a question of your requirements and taste. Both invoice formats can be used from 2025.  Details on both types of e-invoice can be found here. The advantage you gain from using these electronic invoices is quite simply due to their machine readability. Easier and smoother processing on the receiving end is one of the benefits.

More details on the upcoming e-invoicing requirement 

We are still at an early stage, to be sure. But one thing is already certain: The two formats ZUGFeRD and XRechnung will be the invoice types of choice as of 2025. This is also illustrated by the following sentence from the BMF letter. If the legislator were to adopt the wording contained in the government draft of the Growth Opportunities Act unchanged in this respect, invoices in these two formats would therefore also meet the new VAT requirements for an electronic invoice after 31 December 2024 (PDF, DE). The question that remains to be clarified is how other invoice formats, e.g. EDI (electronic data interchange), will be dealt with. We don’t have a concrete answer to this yet. However, it is well known that EDI processes have been in use for several decades. That is why (…) a solution is currently being worked on to ensure the continued use of EDI processes as far as possible, even under the future legal framework (PDF, DE).

Electronic invoices – what do I have to consider? 

You already use easy invoice, but you want to be prepared and switch to e-invoicing in 2025 and you still have questions? Contact us. 

Contact us now
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