On 8.7.2024, the author published an article on the VAT obligation to issue elec…
On 8.7.2024, the author published an article on the VAT obligation to issue electronic invoices from 1.1.2025. Based on the draft letter of the Federal Ministry of Finance of 14.6. 2024 (“BMF-draft”) and the related literature, this is supplemented below.
The various possible invoice formats and their treatment during the transition phase are briefly discussed below:
1.1 Paper invoice
From 1.1.2025 with the transitional periods 1.1.2027 and 1.1.2028, paper invoices will no longer be the rule for supplies between VAT-registered businesses based in Germany ("B2B"). However, it remains the rule for invoices to private customers ("B2C") or to VAT entrepreneurs not located in Germany, unless they agree to an electronic invoice.
The decisive factor for the 1.1.2025/27 or 28 deadlines is when the service to be invoiced is deemed to have been "performed". In the case of deliveries, this is generally when the recipient acquires the power of disposal and, in the case of other services, when the service has been completed.
1.2 E-invoice according to structured electronic format
There are two recognized formats according to the CN 16931 standard: (i) X-Rechnung and (ii) ZUGFerD.
X-Rechnung formats are already standard for public contracts ("B2G"). X-invoices are initially not human-readable but are pure xml files, which can be made human-readable with the appropriate IT software.
ZUGFerD is a hybrid format. The xml files are embedded in human-readable PDF/A3 files.
The receipt of these formats must be guaranteed by the invoice recipient for B2B from 1.1.2025. The invoice recipient does not have to agree.
1.3 E-invoice interoperable with a structured electronic format
Other e-invoice formats that allow extraction into the X-invoice or ZUGFerD format are also permitted. However, this requires the consent of the invoice re-cipient.
Extraction is necessary because electronic invoices are to be exchanged in real time with the taxpayer and the tax authorities after the transition phase.
1.4 Other EDI formats not interoperable with structured electronic format
These e-invoice formats are still permitted until 31.12.2027 with the consent of the invoice recipient; after this date, they will no longer be permitted.
1.5 E-invoice in another electronic format (e.g. PDF)
These invoices are permitted until 31.12.2026 with the consent of the invoice recipient. Companies/VAT groups with turnovers within the meaning of the small business regulation (Section 19 (3) German VAT Code “UStG”) of no more than EUR 800 thousand in the 2026 calendar year can still use these formats until 31.12.2027 with the consent of the invoice recipient.
1.6 Invoices for small amounts and tickets
There is no e-invoice obligation for these invoices. Receipt of an e-invoice generally requires the consent of the service recipient.
If the invoice issuer did not issue an e-invoice by mistake, but was obliged to issue an e-invoice, any other invoice issued instead can be corrected by issuing an correct e-invoice in accordance with Section 15.2a (7) UStAE. The correcting e-invoice must express this in a clear reference to the original other invoice. Subject to the other re-quirements, the correction is effective back to the date of issue of the other invoice, even if the input VAT deduction is not permitted in accordance with para. 47 of the BMF-draft (para. 48 of the BMF draft).
The recipient's consent to the issue of an invoice in a different electronic format does not require any special form. Consent can be given in the general terms and condi-tions or concluent.
Invoices received electronically must also be stored electronically by VAT entrepre-neurs. A human-readable copy is not sufficient. A VAT audit will use the technical pos-sibilities of electronic evaluation in the future. Extraction into the financial accounting system is not mandatory, but it is recommended.
If there is no invoice for small amounts (gross amount up to EUR 250), the e-invoice obligation also applies if the entrepreneur makes purchases "at the counter" (e.g.sales at Metro Markets). This also applies, for example, to business meals in a restaurant.
Credit notes are also invoices for VAT purposes and the e-invoicing obligation applies.
In future, it will be important for entrepreneurs to differentiate when issuing invoices, at the latest after the transition period:
a) Invoices to other entrepreneurs must be issued electronically.
aa) The X-Rechnung or ZUGFerD formats do not require the consent of the in-voice recipient.
bb) Formats interoperable with the X-Rechnung or ZUGFerD format require the consent of the invoice recipient.
cc) Other electronic formats are no longer permitted.
b) Invoices to (i) non-entrepreneurs, (ii) entrepreneurs for their non-business area, (iii) entrepreneurs not established in Germany (without a VAT permanent estab-lishment) and (iv) small-value invoices and travel documents remain other invoic-es in paper or e.g. as a PDF-document. Service recipients must agree to an e-invoice. This is particularly relevant for supplies of work and other services in connection with a property to non-entrepreneurs, as there is an invoicing obligation under Section 14 (2) No. 1 UStG, but e-invoices would require consent.
Practical tip: It may make sense to send electronic invoices in future that are also human-readable, e.g. with or embedded in a PDF document.
It is recommended that the introduction of e-invoices be seen as an opportunity to in-crease the efficiency of automated processing in invoicing processes. VAT audits by the tax authorities should also run more efficiently in the future. ADVANT Beiten's tax teams at our 6 offices in Frankfurt, Düsseldorf, Munich, Hamburg, Berlin and Freiburg will be happy to assist you with tax-related questions and the technical implementation of e-invoices.
