Germany’s E-Invoicing Mandate: What Businesses Must Do Before 1 January 2027

Germany is moving from “a PDF by email is fine” to mandatory structured e-invoicing for business-to-business (B2B) sales in three steps. The first step, the obligation to receive e-invoices, has applied since 1 January 2025. The second, and the one most finance teams are preparing for now, starts on 1 January 2027: businesses with total turnover above €800,000 in 2026 must issue e-invoices for domestic B2B supplies. From 1 January 2028, the obligation covers everyone.

This guide explains who is affected, which formats count, what is exempt, how the transition rules work and what to do in the time left. It reflects the position as checked on 7 November 2026, including the Federal Ministry of Finance (BMF) letter of 15 October 2026, which left the deadlines unchanged.

The timeline

Period	Receiving	Issuing
2025 and 2026	Mandatory for all domestic businesses	Paper invoices still allowed; PDFs and other electronic formats allowed with the recipient’s consent
2027	Mandatory	E-invoices mandatory if 2026 turnover was above €800,000. Businesses at or below €800,000 may still use paper or, with consent, other electronic formats. EDI invoices remain possible with the recipient’s agreement
From 1 January 2028	Mandatory	E-invoices mandatory for all domestic B2B supplies (subject to exemptions)

The legal basis is the Growth Opportunities Act (Wachstumschancengesetz), which rewrote section 14 of the German VAT Act (UStG). The BMF has explained the details in a series of administrative letters: the main guidance of 15 October 2024, a follow-up of 15 October 2025, and a further letter of 15 October 2026 that added supplementary rules without moving any deadline.

Who is affected

The mandate applies to domestic B2B supplies: transactions where both the supplier and the customer are businesses established in Germany and the supply is subject to German VAT invoicing rules. It does not apply to:

• sales to consumers (B2C);
• cross-border B2B supplies, which will be addressed by the EU’s VAT in the Digital Age (ViDA) rules from July 2030. See our guide to European e-invoicing mandates;
• suppliers that are not established in Germany, even if they are VAT-registered there.

The €800,000 test uses the issuer’s total turnover (Gesamtumsatz, as defined in section 19(3) UStG) for the previous calendar year. For the 2027 rule, that means 2026. It is not measured per customer or per invoice. A business with €1.2 million of turnover must issue e-invoices to all its domestic business customers from 1 January 2027, even if some of those customers are tiny.

Watch the receiving side too. The obligation to accept e-invoices has had no transition period since January 2025. If your suppliers start sending XRechnung files in January 2027, your accounts payable team must be able to process them, not just store them.

What counts as an e-invoice

Under the new section 14 UStG, an e-invoice is an invoice issued, transmitted and received in a structured electronic format that allows automatic processing and complies with the European standard EN 16931. In practice:

Format	What it is	Typical users
XRechnung (UBL or CII)	Germany’s national EN 16931 profile; pure XML	Public-sector suppliers; businesses with ERP or e-invoicing platforms
ZUGFeRD 2.x / Factur-X	Hybrid: a PDF/A-3 with embedded CII XML. Valid from version 2.0.1, except the MINIMUM and BASIC-WL profiles	SMEs that want a human-readable document plus machine-readable data
Other formats	Allowed if both parties agree, the data can be extracted correctly and the result is interoperable with EN 16931	Established EDI relationships

A paper invoice, a scanned image or an ordinary PDF are “other invoices” (sonstige Rechnungen). They remain usable only within the transition rules below. In a hybrid ZUGFeRD invoice, the XML data takes precedence; if the PDF and the XML disagree, the XML counts.

The law does not prescribe how invoices travel. Email, a customer portal, an API or the Peppol network are all acceptable if the parties agree. Peppol is increasingly used for cross-border consistency; see What is Peppol?

Exemptions

• Small-value invoices (Kleinbetragsrechnungen) with a gross amount up to €250.
• Travel tickets that serve as invoices.
• VAT-exempt supplies under section 4 nos. 8 to 29 UStG, such as many financial, insurance, medical and property letting services.
• Small businesses using the small-business scheme (Kleinunternehmerregelung, section 19 UStG) do not have to issue e-invoices. They must still be able to receive them.

Transition rules in detail

2025 and 2026: everyone may still send paper

Until 31 December 2026, any business may issue paper invoices for domestic B2B supplies. Other electronic invoices, such as a PDF by email, need the recipient’s consent. Many businesses are using this period to switch customer by customer.

2027: the €800,000 split

In 2027, the rules diverge. A business whose 2026 turnover exceeded €800,000 must issue e-invoices. A smaller business may continue with paper or, with consent, other electronic formats for one more year. EDI invoices that do not meet EN 16931 may also continue during 2027 if the recipient agrees, which gives large retail and manufacturing supply chains time to upgrade their EDI messages.

2028: no more paper for domestic B2B

From 1 January 2028, all domestic B2B invoices within scope must be e-invoices. The only remaining non-structured invoices are those covered by the exemptions above.

Risks of getting it wrong

There is no specific new penalty regime for missing e-invoices, but the consequences are real:

• Input VAT recovery. A customer needs a correct invoice to deduct input VAT. Where an e-invoice is required, a PDF does not meet the formal requirements, and buyers and tax auditors may challenge the deduction. Expect larger customers to reject non-compliant invoices, which delays your payments.
• General VAT penalties. Failing to issue proper invoices can be an administrative offence under the existing VAT rules.
• Archiving. The structured XML is the original. It must be stored unaltered and remain machine-readable for the statutory retention period, in line with the GoBD principles that the BMF updated in July 2025. A printout or visual copy is not enough.

Readiness checklist for 2027

1. Confirm your 2026 turnover band as early as possible, and document it.
2. Ask your ERP or accounting software vendor in writing which formats and versions they support (XRechnung 3.x, ZUGFeRD 2.x), and from which release.
3. Clean customer master data: legal names, addresses, VAT IDs, buyer references (Leitweg-ID for public bodies) and preferred receiving channel.
4. Agree a transmission channel with key customers: email, portal, API or Peppol.
5. Prepare accounts payable to import XML, validate it and route it for approval. Use the opportunity to automate invoice matching.
6. Update archiving so that XML originals are stored in an audit-proof system.
7. Test with two or three friendly customers during 2026 while the transition rules still allow fallbacks.

Frequently asked questions

Is the €800,000 threshold gross or net?

It refers to total turnover as defined in section 19(3) UStG for the previous calendar year. Confirm with your tax adviser how this applies to your specific revenue mix, especially if you have VAT-exempt or non-taxable income.

Can I still send a PDF in 2027?

Only if your 2026 turnover was €800,000 or less, and only with the recipient’s consent. From 2028, a PDF is not acceptable for domestic B2B invoices within scope.

Do I need Peppol?

No. Germany does not prescribe a channel. Peppol is one option, popular with businesses that also invoice in Belgium, the Nordics or, from 2029, the UK.

We are a foreign company VAT-registered in Germany. Are we affected?

The issuing obligation applies to businesses established in Germany. A foreign company that is merely VAT-registered is generally outside it, but confirm the treatment of any German fixed establishment with your adviser.

How do we read XRechnung files?

Most accounting software can display them. The tax administration also offers a free visualisation function through the ELSTER portal.

Conclusion

For businesses above €800,000, there are now less than two months before e-invoices become mandatory. The technical change is manageable: a format, a channel and an archive. The organisational work around master data, customer communication and accounts payable automation takes longer, so it is worth starting with the largest customers and suppliers first.

Sources

• Bundesministerium der Finanzen (BMF), guidance letters on mandatory e-invoicing (15 Oct 2024, 15 Oct 2025, 15 Oct 2026); KPMG summary of the 2024 letter
• IHK Region Stuttgart, E-Rechnung: Pflichten und Übergangsregelungen
• BDO Germany, E-invoicing in Germany

This article is general information about German VAT invoicing rules and not tax advice. Confirm your position with a Steuerberater or other qualified adviser. Last checked: 7 November 2026. See our Disclaimer.