Global Daily Tax News, Germany Clarifies Incoming E-Invoicing Rules, (Jun 20, 2024)

The German Government has released guidance on the introduction of electronic invoicing obligations starting January 1, 2025.

The guidance was released in the form of a draft letter, in German only, by the Ministry of Finance on June 13, 2024. Based on feedback, the letter will be finalized in the fourth quarter of 2024.

The letter sets out the rules concerning the formatting of invoices; how invoices should be transmitted; record retention requirements; input tax credit matters; and transitional provisions.

As explained in the guidance, Germany will introduce a requirement for taxable persons to accept electronic invoices for domestic supplies from January 1, 2025, for instance through the provision of an email address.

While the requirement will be introduced from January 1, 2025, the transitional rules provide that invoices may be submitted other than in electronic format until the end of 2026.

The requirement to issue invoices electronically will be phased in gradually beginning in 2027. The provision of an invoice using a USB stick will not be considered compliant. Taxpayers whose turnover was not greater than EUR800,000 in the previous year will be allowed to comply with the requirements starting from January 1, 2028.

Invoices would need to conform with the European eInvoicing standard and they must be machine readable. The guidance provides that a different format may be agreed between issuer and recipient, providing the format allows for the correct and complete extraction of the information required by the Value Added Tax Act (UStG) from the e-invoice into a format that complies with or is interoperable with the EN 16931 standard.