e-Invoicing mandates and updates: Germany

May 2023

Germany propose B2B e-Invoicing mandate for January 2025

Germany has now announced it’s proposed timeline for implementation of a B2B e-Invoicing mandate covering all domestic transactions. The German Federal Ministry of Finance (Bundesministerium der Finanzen or BMF) issued a discussion document on April 17, 2023 with details of the proposed changes to the current legislation. This timeline would see implementation of the proposed mandatory e-Invoicing regime commencing on 1st January 2025.

The proposal takes into account the framework proposed by the VAT in the Digital Age (ViDA) proposal put forth by the European Commission in December 2022.

There are indications as to what key changes would be made to the existing German tax legislation.

Firstly, Germany will update the legal definition of invoices to include electronically issued invoices. The definition of an e-Invoice would be based on the ViDA proposal and the European Norm (EN16931) standard introduced by the EU Public Procurement Directive (2014/24/EU).

E-Invoices would then become the default and mandatory system of invoicing for all B2B transactions, replacing paper.

Any other types of invoices, such as paper, and electronic formats including PDF and EDI would be grouped together as “Other invoices”, and are out of scope of the mandate. There remains some confusion as to what place there might be for such invoices, if any.

The proposal also includes amendments to the existing German laws which cover the requirements for authenticity, integrity, and legibility of the invoices.

The Ministry of Finance is seeking input from businesses, software/solution providers and other stakeholders prior to issuing a draft law. This consultation process is due to run from April through to 8th May 2023.

The BMF is seeking comments around whether the government should seek a phased deployment as per France or should take more of the “big bang” approach of Poland. They are also seeking input regarding whether a phased approach should be based on size of company, invoice amounts or other alternatives.

Also open for comment is whether exceptions to the mandate should be made for certain invoice types such as micro invoices, tickets etc.

The proposal also presents two different implementation models.

One of the proposed approaches would be to leverage the PEPPOL network in a “5-corner model” leveraging the established PEPPOL network. PEPPOL Access Points would send a copy of the invoices to the proposed government e-Invoice portal for validation prior to issuance between PEPPOL end points.

The second approach would be to follow a model more like that proposed in France using certified private platforms to validate invoices prior to submission to the central government platform.

This is an important next step in Germany’s journey to mandatory e-Invoicing and it’s gratifying to see the German tax ministry seek input from key stakeholders. Once the German government collates these comments, we expect to see a more concrete formulation of legislation, although at this point no clear time line has been established for next steps.

Ken Clark

Ken Clark is a Director of Product Marketing for OpenText Business Network based in the UK. For over 30 years Ken has been a subject-matter expert in the areas of digital transformation and automation, B2B/EDI/A2A integration, and e-Invoicing and tax compliance. Ken spent much of his career as a hands-on practitioner, consulting on customer problems and implementing business-focused solutions around global supply chain management, order-to-cash and procure-to-pay. Today Ken focuses on solutions for information exchange, B2B and A2A integration, and e-Invoicing.

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