Article

Mandatory e-Invoicing in Germany

24 March 2023

What You Need to Know!

The German government plans to introduce new regulations mandating e-invoicing for B2B businesses to modernize and streamline its tax system.

This development will have significant implications for companies operating in Germany, particularly those that rely heavily on traditional paper-based invoicing methods.

Unimaze provides an overview of German e-invoicing regulations and highlights what companies need to know to ensure compliance with the new requirements.

E-Invoicing in Germany - A Quick Overview

E-Invoicing/CTC Model

  • B2G: Centralized/Peppol
  • B2B: Post-Audit

Mandatory Infrastructure

  • B2G: Individual platforms in each state (16) and Peppol
  • B2B: Not Applicable

Mandatory e-Invoice Format

  • B2G: Xrechnung, Peppol BIS
  • B2B: Not Applicable until 1st January 2024

Issuing Mandate

  • B2G: Suppliers to all Federal and Bremen contracting authorities
  • B2B: No explicit requirements

Receiving Mandate

  • B2G: All Contracting Authorities
  • B2B: Buyer Has to Give Consent

Digital Signature

Optional

Archiving Abroad

Allowed under specific conditions

Archiving Period

10 Years

E-Invoicing in Germany: The Timeline

2020

Germany’s journey toward e-invoicing started in 2020 when the country introduced mandatory B2G electronic invoicing according to the European Directive 2014/55/EU.

The development of e-invoicing varies from one federal state to another. Each state (Bundesland) publishes its transposition of the EU directive via a decree law regulating communication systems, entry points, and formats.

The federated states can decide whether to follow the Core Invoice User Specification (CIUS) model or their e-invoicing standard.

They can also choose whether to use the Zentrales Rechnungseingangsportal OZG-RE platform, the central government’s

Note: Federal States looking to develop their web service must offer a connection via the Peppol network. For this, the states must work with an access point provider.

Unimaze is an authorized Peppol access point provider, providing the infrastructure and support to enable Germany’s Federal States to roll out B2G e-Invoicing.

2023

Suppliers in Mecklenburg-Vorpommern, a Federal State in Germany, were mandated to start issuing e-invoices.

2024

Hesse and Rhineland Palatinate suppliers must issue e-invoices when trading with government agencies.

The Federal States in Germany use a decentralized e-billing system, which makes the introduction of B2B e-invoice a massive challenge.

Still, the government intends to push for the adoption of B2B e-invoicing in Germany to help curb tax fraud.

Even without the government push, e-invoicing yields many benefits, and any forward-thinking private business in Germany should consider implementing it.

Germany e-Invoicing Proposal

Germany has recently joined other European nations in calling for mandatory B2B e-invoicing to tackle VAT fraud. With successful implementations of e-invoicing in Italy and Hungary and plans for Poland and France in 2023, Germany's Bundestag parliament is advocating for a similar system to be implemented.

Even though there is already a public platform in place, the Zentrales Rechnungseingangsportal OZG-RE platform, to aid small and medium-sized businesses, adopting a standard regime across all 16 federal states presents a challenge.

However, Germany's Finance Minister has already raised the need for mandatory e-invoicing.

He has called for introducing an electronic reporting system similar to the Italian Sistema di Interscambio to be implemented nationwide, allowing for creating, checking, and forwarding invoices.

With the backing of the Bundestag and the new government, Germany will likely adopt mandatory e-invoicing soon.

Germany B2B e-Invoicing

Germany has implemented mandatory usage of e-invoicing for B2B transactions only for federal authorities.

In contrast, for other B2B transactions, businesses can use e-invoicing if their customers request it.

The most commonly used formats for B2B e-invoicing in Germany are XRechnung and ZUGFeRD, which aim to provide a standardized and efficient way for businesses to manage their invoices and financial transactions.

How Can Businesses Prepare for Mandatory B2B E-Invoicing in Germany?

As B2B e-invoicing is set to become a reality in Germany, businesses should prepare for the transition. Here are a few key things they can do:

  • Choose an E-Invoicing Solution: E-invoices in Germany should be Peppol compliant. This applies to both B2B and B2G e-invoices. So, the first step is looking for an e-invoicing solution provider to connect them to Peppol.

Unimaze is a certified Peppol access provider in Germany and provides user-friendly, reliable, and secure electronic invoice solutions for businesses of all sizes.

  • Train Employees: It's important to train employees to use the new e-invoicing system. The training includes creating, sending, and receiving e-invoices and troubleshooting any issues that may arise.

Besides connecting you to the Peppol network, Unimaze will also help onboard your AP department to learn to leverage the new invoicing system immediately.

  • Update Their Accounting Systems: B2B e-invoicing will likely require businesses to update their accounting systems to accommodate the new invoicing process.

The process may involve integrating the e-invoicing solution with existing accounting software or implementing a new system.

Unimaze cloud-based electronic invoicing solutions can integrate with multiple accounting and ERP systems. The best part? You don't have to upgrade your current setup.

  • Test the System: Before the mandatory implementation date, businesses should test their e-invoicing system to ensure it works properly. That way, they identify any issues or glitches that need attention before the system goes live.

Again, Unimaze will be at hand to ensure your electronic invoicing system works smoothly. We'll also provide technical support in case of problems.

Is the e-Invoicing Mandate in Germany Any Good for B2B Businesses?

Yes, mandatory e-invoicing will benefit German private businesses in many ways, including:

  1. Faster Processing Times: Electronic invoicing can reduce invoice processing times from weeks to a few days, resulting in quicker payments and improved cash flow.
  2. Reduced Administrative Costs: Businesses can reduce the time and costs associated with manual data entry and paper-based processes by automating invoicing.
  3. Improved Accuracy: E-invoicing eliminates the risk of errors associated with manual data entry and paper-based processes, improving overall accuracy.
  4. Enhanced Security: Electronic invoices are more secure than paper invoices, offering encryption and digital signature features that provide greater protection against fraud and identity theft.
  5. Reduced Paper Usage: E-invoicing eliminates the need for paper-based processes, reducing paper usage and helping businesses become more environmentally sustainable.
  6. Increased Visibility into the Invoicing Process: E-invoices provide greater visibility into the invoicing process, making it easier to track the status of invoices and identify potential issues.
  7. Easier Tracking of Payments and Outstanding Invoices: With e-invoicing, businesses can easily track payment status and outstanding invoices, helping them manage their cash flow more effectively.
  8. Improved Supplier Relationships Through Faster, More Accurate Invoicing Processes: E-invoicing can help businesses build stronger relationships with suppliers by providing faster, more accurate invoicing processes.

Unimaze Can Help Your Business Transition from Paper to e-Invoicing in Germany

As e-invoicing and a Peppol access point provider, Unimaze offers a unique opportunity for German businesses to leap from traditional paper-based to modern, electronic invoicing.

By working closely with businesses, Unimaze can tailor solutions to meet their needs and help them transition smoothly to e-invoicing.

Beyond just saving time and money, Unimaze's technology provides enhanced security features, helping to safeguard against fraud and identity theft.

With Unimaze's help, businesses can streamline their invoicing processes, reduce their environmental footprint, and build stronger relationships with their suppliers, all while staying at the forefront of technological innovation.

Besides, by embracing e-invoicing with Unimaze, German businesses can leverage a more efficient, secure, and sustainable invoicing process.

Get in With Unimaze Touch Today

Your journey to becoming part of the revolution of e-invoicing in Germany starts with booking a meeting with one of our electronic invoice experts.

The expert will ask you about your business and recommend an e-invoicing solution.

Book a Meeting Today

e-Invoicing in Germany: FAQs

How do I invoice in Germany?

Invoicing in Germany follows a standard set of rules and regulations.

Here are the steps you can follow to create an invoice in Germany:

  1. Include Your Company's Details: Name, address, and tax ID number (Steuernummer).
  2. Include Your Customer's Details: Name and address.
  3. Create an Invoice Number: The invoice should have a unique number at the top of the document.
  4. Include the Date: The invoice date should also be at the document's top.
  5. Describe the goods or services, including the quantity, price, and applicable taxes.
  6. Add VAT if your company is subject to VAT (Value Added Tax)
  7. Total the Invoice: Add up the total cost of the goods or services, including VAT, if applicable.
  8. Specify payment terms, including the due date and any discounts for early payment.
  9. Send the invoice to your customer, and keep a copy for your records.

Note: In Germany, there are specific requirements for invoices, such as the mandatory use of German and including certain information.

So, ensure your invoice complies with these requirements to avoid legal issues. You can find more information on invoicing in Germany on the German Federal Ministry of Finance website.

Can a Private Person Invoice a Company in Germany?

Yes, a private person can invoice a company in Germany if they are providing a service or selling goods as part of a business activity, but they must follow certain rules and regulations when invoicing.

Note: As a private person, you may not be subject to the same tax and accounting regulations as a business. If you need clarification about the rules and regulations that apply to you. In that case, you should consult a tax professional or accountant to ensure you are invoicing correctly and compliantly.

Do You Need a Commercial Invoice for Germany?

Yes, you do.

The purpose of a commercial invoice is to provide customs officials with important information about the goods being shipped, including the value, quantity, and nature of the goods.

This information determines customs duties and taxes. It also ensures that the goods comply with applicable regulations.

Is eInvoicing Mandatory in Germany?

Yes, eInvoicing has been mandatory in Germany for businesses dealing with federal authorities since November 2020.

However, businesses are not required to use eInvoicing for all their invoices. It is up to individual companies to decide whether to use it for their transactions with other businesses or consumers.

What is the Format of e-Invoicing in Germany?

The format of e-Invoicing in Germany is regulated by the European standard known as the Electronic Data Interchange for Administration, Commerce, and Transport (EDIFACT).

The most commonly used format for e-Invoicing in Germany is the XRechnung, based on the EDIFACT standard and compatible with the most common accounting software.

What is the XRechnung?

The XRechnung is a standard format for electronic invoices in Germany based on the European EDIFACT standard. It was introduced to make invoicing more efficient and to ensure compliance with legal requirements for electronic invoicing.

What is the ZUGFeRD?

The ZUGFeRD is a hybrid electronic invoicing format used in Germany, which combines a PDF document with an embedded XML file. It aims to provide a standardized format for electronic invoices that is human-readable and machine-readable.

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