Mandatory E-Invoicing from 2025
Starting on January 1, 2025, electronic invoicing (E-invoicing) will become mandatory for companies in Germany. This new regulation affects all B2B transactions between taxable businesses and aims to make the invoicing process more efficient and transparent. But what does this mean in practical terms?
What is an E-Invoice?
An E-invoice is an invoice issued, sent, and received in a structured, machine-readable format. Formats like PDF or paper are not sufficient, as they cannot be directly integrated into accounting and ERP systems. Instead, companies will need to switch to formats like ZUGFeRD or XRechnung.
Who is Affected by the E-Invoicing Obligation?
The obligation to use E-invoices will apply to all taxable companies engaged in business transactions with other companies in Germany from 2025 onwards. Small businesses and freelancers are not exempt from this requirement.
Advantages of E-Invoicing
- Efficiency: Invoices can be processed and paid faster since manual data entry is not required.
- Cost Savings: Significant savings can be achieved by eliminating paper, printing, and postage costs.
- Legal Security: E-invoices reduce the risk of errors and fraud attempts, as the exchange of invoices is traceable and documented.
Exemptions from the E-Invoicing Requirement
Certain invoices, such as small invoices under 250 euros or transportation tickets, are exempt from the E-invoicing obligation and can still be sent in paper form or as a PDF.
Conclusion
The transition to E-invoicing as mandated by the Growth Opportunities Act represents a significant change, requiring companies to digitize their invoicing processes. We recommend addressing these new requirements early on and adjusting your systems accordingly to meet deadlines and legal obligations while benefiting from the advantages of digitalization.
If you need support with this transition, we are here to offer you advice.