E-invoicing in Germany: the Federal Ministry of Finance (BMF) clarifies the rules for E-Rechnung ahead of 2027

Receiving e-invoices in Germany is mandatory for all companies since January 1, 2025, while issuing E-Rechnung will become mandatory starting January 1, 2027, for companies whose revenue in 2026 exceeded 800,000 euros. Companies below this threshold may issue other types of invoices (paper or, with the recipient’s consent, e.g., PDF) until December 31, 2027. As of January 1, 2028, the e-invoice requirement applies to everyone. Thus, 2027 is not a uniform start date for all businesses.

Not every error detected by the validator means that the invoice is invalid for VAT purposes. The BMF distinguishes between format errors and violations of the EN 16931 business rules. A format error may render the file ineligible as an E-Rechnung. A violation of a business rule does not automatically revoke the document’s E-Rechnung status. The key factors are whether the invoice can be processed and whether the mandatory tax data is complete and correct. In practice, it is helpful to distinguish between three areas: format compliance, validation rules, and the accuracy of tax-required data.

Mandatory invoice elements are to be entered into the appropriate BT (Business Terms) fields in the structured section. The BMF refers here to the mapping tables prepared by KoSIT (Koordinierungsstelle für IT-Standards—the IT Standards Coordination Office) and FeRD (Forum elektronische Rechnung Deutschland—the German Forum for Electronic Invoicing). The description of the service must include the type, scope, content, and, if applicable, the location of the service in the XML data.

If an invoice is subject to the e-invoicing requirement, its correction must also be an e-invoice. When read together, the original invoice and the correction must unambiguously indicate the applicable information. A correction may also take the form of a credit memo (Gutschrift) issued by the recipient, provided the parties have agreed to this in advance and the document explicitly refers to the original invoice. The correction is closely linked to the processing of the original invoice.

E-invoices issued by December 31, 2026, in accordance with the 2024 and 2025 guidelines, will not be challenged, including for VAT deduction purposes. The BMF also clarifies that issuing a different type of invoice instead of the mandatory E-Rechnung is not an offense punishable by a fine. However, such an invoice remains invalid, and the business partner may expect to receive an e-invoice.

The BMF circular does not impose obligations directly on software providers, but it does have practical implications for them. The BMF recommends mapping the required data to the EN 16931 fields according to the KoSIT and FeRD tables. Companies that wish to take advantage of the simplifications for final invoices, construction invoices, and gross-price invoices need systems that support these scenarios, including embedded attachments. It is advisable to coordinate this with the provider of the invoicing system or transmission service, such as the Peppol network.

• Data mapping: Assigning SAP fields to BT fields in accordance with the KoSIT/FeRD tables for the applicable format (XRechnung or ZUGFeRD).
• Item description: Whether the descriptions of materials and services are included in the structured portion of the document, not just in the PDF printout.
• Attachments: Support for embedded attachments, such as cost estimates and timesheets.
• Corrections: types of correction documents, reference to the original invoice, self-invoicing scenario.
• Special scenarios: advance and final invoices, construction invoices, and invoices with gross prices.
• Master Data: Distinction between B2B and B2C customers. In bulk sales, it is sufficient to set the customer’s status when concluding or amending a contract.
• Validation and testing: the entire end-to-end process, from source data in SAP, through validation, to transmission (e.g., via a Peppol provider) and handling of corrections. This also applies to incoming invoices.