Mandatory E-Billing: What Takes Effect in 2025, and What Follows in 2027 and 2028

What is an e-bill, and what isn't?

The law defines an e-invoice by its format. It is issued, transmitted, and received in a structured electronic format and can be processed electronically. The format must comply with the European standard or be agreed upon by the parties involved, and the content must be capable of being accurately and completely transferred into a standard-compliant format (Section 14(1) of the German Value-Added Tax Act (UStG)). Anything else is considered a non-electronic invoice: paper or another electronic format.

The difference isn’t visual. An e-invoice is a data record that software can read without manual data entry. A PDF, a photo, or a Word file merely displays an invoice. There are two types. Purely structured formats like XRechnung contain only data; you need a viewer to read them. Hybrid formats like ZUGFeRD (version 2.0.1 and later) include both the data record and a human-readable section in a single file. The structured portion is what matters for record-keeping purposes.

Who will be required to receive e-invoices starting in 2025?

As of January 1, 2025, every domestic business must be able to receive e-invoices if another domestic business issues them. This requirement applies without exception, explicitly including small business owners and business owners with tax-exempt revenue, such as landlords. The issuer no longer needs consent to send e-invoices (Section 14(1) of the German Value-Added Tax Act (UStG)).

Anyone who cannot accept an e-invoice or refuses to accept one is not entitled to have the issuer send them another type of invoice. An email inbox is sufficient for receiving it. No specific method of transmission is required: email, download via a portal, or an electronic interface are all acceptable. You should clarify with your business partner which method applies.

You are not required to process e-invoices electronically. The fact that they must be capable of being processed does not obligate you to actually do so. However, you must retain them. Therefore, no one is required to purchase accounting software in order to comply with the obligation to receive them.

When must companies begin issuing e-invoices?

A transitional provision applies to the issuance of invoices (Section 27(38) of the Value-Added Tax Act). For transactions carried out in 2025 and 2026, the invoice may be issued on paper until December 31, 2026, or, with the recipient’s consent, in another electronic format such as PDF. For transactions in 2027, this provision remains in effect until December 31, 2027, provided that the issuer’s total revenue in the previous year did not exceed €800,000. In addition, non-compliant electronic exchange via EDI remains permissible until December 31, 2027, also with the recipient’s consent. After that date, the requirement applies immediately.

As of October 2026, anyone may still submit invoices in paper or PDF format. Anyone with total revenue exceeding €800,000 in 2026 must issue e-invoices starting January 1, 2027.

Total revenue is the same term as used in the small business regulation (Section 19(2) of the German Value-Added Tax Act (UStG)). It is based on payments received—that is, on the date the money is received—not on the invoice date. Revenue from the sale of fixed assets is not included. Selling a machine or a company car in the previous year does not cause a taxpayer to exceed the threshold.

Who is exempt from the e-invoicing requirement?

The requirement to issue invoices applies to services provided to other businesses if both are based in Germany (Section 14(2), second sentence, No. 1 of the German Value-Added Tax Act (UStG)). Invoices to private individuals and to businesses abroad are not currently covered. The same applies to services provided to legal entities that are not businesses—such as many associations and government agencies—even if you are required to issue an invoice to them. Other exceptions:

Small business owners under Section 19 of the German Value-Added Tax Act (UStG) may always submit their invoices as “other invoices” (Section 34a, sentence 4, of the German Value-Added Tax Implementation Regulation (UStDV)). If a small business owner switches to standard taxation, they must issue e-invoices from that point forward, provided all other requirements are met. The same applies to invoices for small amounts up to a total of €250 (Section 33 of the German Value-Added Tax Implementation Regulation [UStDV]) and to travel tickets (Section 34 of the UStDV). Services that are tax-exempt under Section 4, Nos. 8 through 29 of the German Value-Added Tax Act (UStG)—such as rentals and medical treatments—are also exempt from the requirement to issue invoices.

What formats and transmission methods are permitted?

The XRechnung format (as a purely structured format) and the ZUGFeRD hybrid format (version 2.0.1 and later) are established, with the exception of the MINIMUM and BASIC-WL profiles. Any European format that complies with EN 16931 is permitted. Other formats, such as electronic data interchange, are permitted by agreement if the information can be accurately and completely transferred to a format that complies with the standard or is interoperable with it. Which of the permitted formats you use is not a tax issue. You should clarify this with your contractual partner under civil law.

The method by which the invoice is delivered is open: email, portal download, or a direct interface. The mandatory information specified in Section 14(4) of the German Value-Added Tax Act (UStG) remains unchanged; only the format is different. All required information must be included in the structured section, including the description of the service. Supplementary information, such as time sheets, may be included in an attachment that is part of the invoice. A link to an external destination, such as “Details in the customer portal,” is not sufficient.

How long and in what format are e-invoices retained?

Invoices must be retained for eight years, whether issued or received (Section 14b(1), first sentence, of the German Value-Added Tax Act (UStG)). The retention period begins at the end of the calendar year in which the invoice was issued (Section 14b(1), sentence 3, of the German Value-Added Tax Act (UStG)). Section 147(3) of the German Fiscal Code (AO) also specifies a retention period of eight years for accounting documents.

For e-invoices, the structured portion must be retained in its original format. This also applies if a PDF was sent as a copy. The authenticity of the source, the integrity of the content, and machine readability must be guaranteed until the end of the deadline. Therefore, a printout or a PDF copy alone is not sufficient.

A specific archiving system does not require this for VAT purposes. Simply because you store the invoice outside of a system that complies with accounting regulations does not generally constitute a violation of VAT laws. Retention requirements under other regulations remain unaffected for purposes other than VAT.

What does a business need to use e-billing?