Germany’s Mandatory E-Invoicing Rules Reshape B2B Transactions by 2028
Germany's tax administration has published crucial guidance on e-invoicing compliance, as the country moves towards mandatory e-invoicing for B2B transactions. The shift aims to enhance tax transparency and efficiency, with significant changes starting as early as 2024.
The guidance outlines key aspects of e-invoicing compliance, including issuance obligations for e-invoices, handling them in contracts and ongoing service agreements, invoice corrections, used-parts tax representation, and retention requirements for e-invoices. It also details technical validation of e-invoices and categorizes potential errors.
The transition to e-invoicing will occur in two phases. By 2025, businesses must be capable of receiving e-invoices. Then, most B2B transactions will mandate the issuance of e-invoices by 2027 or 2028, depending on the company's annual turnover. Businesses with a turnover of over 800,000 euros in the B2B sector will be the first to be affected, with all companies following suit by 2028.
Failure to comply with these e-invoicing requirements may result in the loss of input VAT deduction rights. Companies risking steuerliche Nachteile and possible sanctions from the Finanzbehörden.
Germany's Growth Opportunities Act introduces mandatory e-invoicing for B2B transactions in 2024. Businesses should familiarize themselves with the published guidance and prepare for the upcoming changes to ensure compliance and avoid potential penalties.
