E-invoicing explained: obligation and more

What is an e-invoice?

An electronic invoice (e-invoice) is a digital document that holds the invoice data in a machine-readable standardised format. The recipient can process it electronically — without breaks.

In legal terms, paper invoices and PDF invoices are not e-invoices:

• Paper invoice — must be scanned and re-keyed to be processed.
• PDF invoice — designed to look like paper. Electronic processing still needs OCR.
• E-invoice — based on the EU standard EN 16931 with a structured XML data set.

In Germany, the term is defined in the Wachstumschancengesetz of March 2024: “An electronic invoice is an invoice issued, transmitted and received in a structured electronic format that enables electronic processing. Any other electronic format or paper invoice is an ‘other invoice’.”

The obligation

Background

The EU ViDA initiative (“VAT in the Digital Age”) plans an electronic VAT reporting system based on e-invoice data. The current plan: from 2028, e-invoices must be reported to the tax authorities within days of the service rendered — near-real-time reporting to fight VAT fraud.

Scope

From 1 January 2025 companies in Germany must be able to receive and process e-invoices for domestic B2B transactions. Conditions:

• Both supplier and recipient are based in Germany.
• The transaction is B2B (or with associations/foundations).

B2C is exempt; B2G has already been largely mandated since 2020. Small-amount invoices (up to €250) and travel tickets remain exempt.

Transition periods

From 1 January 2025 issuance is in principle required too, but with transitions (always subject to recipient consent):

• Through end of 2026 — other invoices allowed with recipient consent.
• Through end of 2027 — other invoices allowed with recipient consent if the issuer’s prior-year turnover is below €800,000.
• From 2028 — e-invoices per EN 16931 required.

Requirements for an e-invoice

EN 16931

The standard defines:

• Core invoice model — the data every e-invoice must contain.
• Syntax bindings — how the model maps to specific electronic formats.

Beyond EN 16931, e-invoices must meet the same requirements as paper invoices (authenticity of origin, integrity of content, legibility) and contain all the required invoice details per §14 UStG.

Retention

E-invoices must be kept for 10 years. Important: invoices must be archived in the format in which they were received — keep the original XML, plus software to read it. Pure paper printouts no longer suffice.

E-invoice formats

EN 16931 prescribes data structure, not a specific technical format. In the German-speaking market the two prevalent formats:

XRechnung

XML-based data model used mainly with German public-sector recipients. Developed by KoSIT, mandatory standard in public procurement.

ZUGFeRD

“Zentraler User Guide des Forums elektronische Rechnung Deutschland”. Hybrid format — XML and PDF combined. The structured XML is authoritative. From version 2.1.1 ZUGFeRD includes an XRechnung-compatible profile.

Software for e-invoicing

Beyond Word and Excel

Office tools can’t natively produce or consume invoices per the EU standard. The new rules favour cloud-native systems that handle compliance and offer integrated processing.

Invoicing tool versus complete solution

Buying a single-purpose invoicing tool covers the new rules — but leaves potential on the table. E-invoicing is a chance to digitalise the related processes: project time tracking, ticket handling, controlling.

• All in one — all data in one place, all processes online.
• Simple, efficient flows — one platform, no chain emails or printouts.
• Measurable business success — every relevant data point feeds analytics.

More on invoicing software in teamspace.

Read on

• E-invoicing (ZUGFeRD and XRechnung)
• Dunning
• Order billing
• DATEV export
• Billing tool

Reviewed in a requirements check

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