E-invoicing: mandatory for entrepreneurs from 2025

As an entrepreneur or service provider, you inevitably have to deal with invoices. However, starting from 2025, businesses must observe changes because of the e-invoicing obligation. This article deals with these innovations and further information.

Paper invoices and e-invoices

Invoices are part of day-to-day business for entrepreneurs, service providers and customers. You write down all the important details when you buy something or use a service. They also serve to regulate payment.

To date, businesses can issue invoices in several ways.

• Classic invoices: Businesses traditionally issue invoices in paper format.
• Electronic invoices: Invoices transmitted in electronic form, e.g. via data exchange (EDI; Electronic Data Intercharge), e-mails (incl. PDF invoice) or computer fax.

Important: The principle of immutability applies to invoices of all types. Therefore, you cannot make changes to details such as: Invoice issuer, date, service description, or recipient.

Invoices for B2B

B2B, Business to Business, describes business relationships and transactions that take place between two companies.

Companies are permitted to issue invoices when they make a delivery or provide other services. In B2B business, however, issuing an invoice is mandatory if the turnover is not tax-exempt.

Good to know: You must issue the invoice no later than 6 months after performing the service. Furthermore, both the supplier and the recipient must have their domicile in Germany.

Either the office, management, or establishment involved in the turnover must be in Germany. If the place of residence is not available, it must be in Germany. §14 para. 2 sentence 3 of the UStG-E states this requirement.

From 2025: mandatory e-invoicing for B2B transactions

From 2025, there will be an obligation to transmit e-invoices electronically in the B2B sector. There are therefore changes in the individual terms.

Starting in 2025, we will make a distinction between electronic invoices and other invoices.

• E-invoices: electronic invoicing in a structured, electronic format. E-bills are issued, transmitted and received in this format. Please note that the format must comply with CEN standard EN 16931.

-> CEN standard EN 16931 is the standardized, semantic data model for e-invoices. It describes the obligation to issue e-invoices.

• We will now consider invoices in paper format, by e-mail, or fax as other invoices.

What changes are occurring?

New changes require increased effort in implementation. Because of the likely high costs, there will be regulations between 2025 and 2027 that will make the transition easier.

You should observe the following until 2026.

• In 2025 and 2026, businesses may continue to issue exported B2B transactions in paper form.
• Electronic invoices that do not comply with the new format (in accordance with the CEN standard), e.g. e-mails, are still permitted.

Agreeing in advance with the invoice recipient is important for the procedure. The invoice issuer must obtain the written consent of the invoice recipient.

Valid until the end of 2027:

• In 2027, businesses may still issue B2B transactions in paper form.
• Electronic invoices that do not comply with the updated format are still permitted. The previous year’s turnover of the invoice issuer may not exceed the limit of max. 800,000 euros, however.

If you exceed the limit, you can use electronic invoices in the EDI procedure.

Applies from 2028:

2028 is the limit for the regulations on the transition and the new requirements. Compliance with the new requirements for e-invoices is mandatory.

The EDI procedure remains a valid option. The prerequisite for this is that the data can be extracted correctly and completely from the invoice format used. These are relevant for VAT purposes. This ensures that the EDI procedure meets the requirements of CEN standard EN 16931.

Advantages for invoice issuers and recipients at a glance

Despite the changeover and the additional work that may be involved in the initial period, the new features offer a number of advantages.

For invoice issuers:

• Simplification of invoicing
• Shorter processing times
• Accelerated processing and timely payment
• Savings when sending invoices by reducing paper and postage
• Improvement of process quality through automatic creation and verification of invoices
• Flexibility through the ability to create invoices from any location.

For invoice recipients:

• Increased data quality through reduced errors
• Savings in invoice processing
• Possibility of decentralized invoice processing
• Flexibility through the option to receive and process invoices regardless of location

To summarize

The introduction of digital invoicing has already brought numerous benefits for companies in Italy. It has increased transparency, improved the efficiency of processes and accelerated the payment of invoices. This outlook is also expected in Germany after the changeover.

The restructuring between 2025 and 2028 may and will likely involve a lot of effort. Companies must change and implement processes so that they comply with the CEN standard. However, once you are used to it, you will benefit from the advantages. Flexibility, savings and simplification: invoices become more transparent and less stressful for both sides.

s&w will be happy to support you with the transition to e-billing.

Photo: Joao Viegas (Unsplash)

Source: Haufe, Datev

Disclaimer: We assume no liability for the accuracy and completeness of the information. The information provided here does not constitute recommendations for action.