On the 17th of November 2023, the Growth Opportunities Act (Wachstumschancengesetz), including the compulsory business-to-business electronic invoicing regulation, was approved by the German Bundestag. The Act underwent several amendments compared to the initially submitted version.
In its recent session on the 21st of February 2024 the German Mediation Council revisited the Growth Opportunities Act. The business-to-business (B2B) electronic invoicing mandate remained largely unchanged, with previous timelines remaining valid. Good news arrived on the 22nd of March 2024 when the Bundesrat approved the Growth Opportunities Act with a clear majority.
This final approval solidifies the B2B electronic invoicing mandate, ensuring its implementation in accordance with the previously established timelines.
Germany’s latest VAT and e-invoicing proposals
Change of the definition of an electronic invoice
The parliamentary votings may change the definition of an electronic invoice and the categorisation of paper invoices.
The votes are leaning towards requiring an electronic invoice (e-invoice) to adhere to the EN16931 standard, or any other data format agreed between the supplier and the buyer - the format must allow correct and complete extraction of the required VAT information from the electronic invoice into a format that aligns with the EN standard.
The second part of this particular proposal involves paper invoices. The proposal states that the categorisation of paper invoices will be classed as other invoices.
New mandatory e-invoicing dates and procedures
If the current parliamentary votings are approved, the following dates and procedures must be followed by all business-to-business (B2B) invoicing scenarios:
- From 1 January 2025 - All businesses should be capable of receiving e-invoices in EN16931, since the consent of the buyer will no longer be needed for sending e-invoices.
- Until 31 December 2026 (previously 31 December 2025) - Paper invoices and e-invoices in formats that do not comply with EN16931 are still allowed, but may only be sent with the consent of the recipient.
- From 1 January 2027 (previously 1 January 2026) - B2B e-invoicing issuance obligation for businesses with a previous year's (2026) turnover of EUR 800,000 or more. As well as the one year extension to this part of the previously proposed mandate, another amendment states that businesses are allowed to continue using EDI from this date onward.
- From 1 January 2028 (previously 1 January 2027) - B2B e-invoicing issuance obligation for all businesses. EDI is still permitted provided that the VAT information can be extracted in EN16931.
The status of EDI
The business sector raised concerns about the costly adaptation of EDI (electronic data interchange) to the standard EN16931.
A new provision, if voted in, will allow a mutual agreement between invoice issuers and recipients on using a different structured electronic format - provided it accurately extracts VAT relevant information.
Germany’s e-invoicing regulations history
Germany, like many European Member States, currently has business-to-government (B2G) e-invoicing mandates in place. All public bodies must be able to receive electronic invoices, and all public body suppliers must send electronic invoices to their government contractor.
The first inclination of Germany’s intentions to mandate B2B electronic invoicing was on the 23rd of June 2023, when the European Commission gave the country permission to move away from certain parts of the European VAT directive.
Germany’s plan aligns with the VAT in the Digital Age directive, which is also persuading many European Member States to address their e-invoicing regulation intentions.
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