The future of e-invoicing and VAT reporting in Germany

DE Tax Compliance

August 23, 2023

In Germany, there are plans to make electronic invoicing between Business-to-Business (B2B) companies mandatory. This change is part of the German government’s efforts to digitise its value-added tax and invoicing processes.

As of July 2021, electronic invoicing for Business-to-Government (B2G) transactions became mandatory in Germany. This means that all companies providing goods or services to the public sector are required to send invoices electronically in a specific format. Simultaneously, there is a requirement that electronic invoices must be sent through the German billing system.

However, on April 17, 2023, the German Ministry of Finance proposed that electronic invoicing should also become mandatory for B2B transactions. The new requirements are still under discussion, but it appears that they will become part of the German value-added tax process in the future.

It also seems that the new rules for e-invoicing will apply to B2B invoices sent from one German company to another.

Electronic Invoicing in Germany

Often, German companies send their invoices physically, in paper form. However, with the new rules for electronic invoicing, e-invoices will become the preferred method for sending and receiving invoices over time. This shift is also accelerated by the authorities’ goal to largely eliminate paper invoices.

The implementation of this policy is being debated in Germany and currently, there are many undecided elements, leading to uncertainty about the specifics of the implementation. Among other things, there is a debate about whether the implementation should occur gradually and what these phases should look like. There are also discussions about whether invoice exchange should occur solely through a public platform or if private platforms should also be accepted. Currently, the implementation is planned to begin on January 1, 2025.

TrueCommerce is a part of EESPA, where many of these discussions take place. Therefore, we are involved in these conversations and are working to find the best solutions for our customers. As a result, we can stay ahead of developments in this area.

The Future of Electronic Invoicing in Germany

Significant changes are on the horizon in Germany in the coming years regarding electronic invoicing and value-added tax reporting, particularly concerning transactions between B2B companies based in Germany.

Additionally, it has been announced that as part of the new rules for electronic invoicing, Germany will introduce an electronic reporting system for B2B invoices, both national and cross-border. Currently, this is planned to take place in 2028.

In most European countries that have implemented or are implementing electronic invoicing and value-added tax reporting requirements, the requirements apply only to invoices exchanged within national borders. Therefore, it is quite intriguing that Germany is discussing introducing requirements for invoices exchanged across borders. Italy is currently the only country to have implemented this as a requirement. Over time, this might expand to include more countries and potentially serve as an indication of what the future of electronic invoicing and value-added tax reporting might look like in Germany and further afield.

Contact one of our specialists to learn how you can ensure compliance in Germany by clicking here

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