Regulatory updates - Germany

The BMF released this second draft letter following consultations with federal and state tax authorities. The document was shared with industry associations for feedback and made public due to its economic significance. Interested parties can submit comments through their associations. Key aspects of the draft letter include the following.

Compliance & Validation

• Formatting errors render e-invoices non-compliant, classifying them as "other invoices";
• Content errors invalidate e-invoices; all mandatory data must appear in the structured part of the e-invoice — merely referencing attachments is insufficient;
• Invoice corrections must match the original invoice format (e.g., a credit note correcting an e-invoice must also be issued as an e-invoice);
• Validation tools are recommended to verify European Norm (EN) 16931 compliance.

Exemptions and consent

• E-invoicing is not mandatory for small amount invoices (below 250 EUR), travel tickets, or from small businesses, though e-invoices may be issued without recipient consent in these cases;
• E-invoicing for transactions to private consumers (Business-to-Consumer or B2C) requires prior consent.

Archiving

• The structured part of an e-invoice must be archived in its original form for eight years, ensuring authenticity, integrity, and legibility via internal controls or electronic signatures/Electronic Data Interchange (EDI).

Amendments to VAT Implementation Decree

• Updated terminology and definitions, clarifying distinctions between e-invoices and "other invoices," structured formats, and EU standards;
• Numerous paragraphs amended to reflect mandatory e-invoicing requirements, including obligations for real estate services, credit notes, and invoice corrections;
• For hybrid invoices, the image part (PDF) and the structured part (XML data) should contain identical invoice information;
• Input tax deduction is permitted only for compliant invoices — for transactions subject to mandatory e-invoicing, this means an e-invoice that fully meets the requirements of the German VAT Act (Articles 14 and 14a UStG).

Special Provisions

• Guidelines for invoices in insolvency or joint ownership cases;
• Correction and replacement procedures for invoices, including notarial and banking services.

The changes outlined in this letter will apply to all transactions conducted on or after January 1, 2025. The final version of the BMF letter is expected in the fourth quarter of 2025.

The Federal Ministry of the Interior and Home Affairs (BMI) and the Federal Ministry of Finance (BMF) have decided to merge the two federal invoice receipt platforms, the Central Federal Invoice Receipt Platform (ZRE) and the Online Access Act-compliant Invoice Receipt Platform (OZG-RE), into the OZG-RE by 2025. This move aims to streamline invoicing across the federal administration, simplifying processes for B2G suppliers.

Transition period

Federal authorities using ZRE will transition to OZG-RE in two phases, with the first wave completed by June 20, 2025. A schedule detailing when authorities will begin receiving invoices via OZG-RE will soon be available on BMI’s website. Suppliers will be notified in advance by their federal buyers about the transition date and will receive all necessary invoicing details.

Actions required by suppliers

BMI confirms that all existing ZRE-registered Peppol routing IDs will be transferred to the OZG-RE platform, so no action is required by invoice issuers submitting e-invoices via the Peppol network.

Suppliers who submit invoices to ZRE through methods such as the web portal should register on the OZG-RE portal. The ZRE portal will be discontinued by December 31, 2025.

On April 1, 2025, the Rhineland-Pfalz E-Invoicing Ordinance RLP 2025 (E-Rechnungsverordnung RLP, ERechVORP) came into effect, mandating electronic invoicing to public entities in the state. This regulation outlines the requirements of the federal E-Invoicing Act, forming part of the implementation of Directive 2014/55/EU on electronic invoicing.

Rheinland-Pfalz

Invoice issuers can submit e-invoices via email, the state's portal, or the Peppol network. Independent of submission methods, businesses first must register on the portal.

The required formats are XRechnung or ZUGFeRD. It is specified that only the XML file of ZUGFeRD hybrid invoices will be processed and sent to the invoice recipient, while the PDF files will be discarded.

More details on how to submit an e-invoice and routing IDs are available here (in German).

Hessen

On April 18, 2024, the B2G e-invoicing obligation took effect in the state of Hessen. Initially, public contracting authorities in Hessen would only receive e-invoices via e-mail to [email protected]. Now, as an alternative, e-invoices can also be uploaded to the state's portal.

The portal's main advantage is that it allows for submitting e-invoices with larger attachments, up to 100 MB, compared to the 22 MB limit for e-mail submissions. Currently, it is not possible to submit e-invoices via Peppol.

More details are available here (in German).