Germany’s E-Invoicing Mandate: What Changes on 1 January 2027

Where things stand right now

Three points make up the current position. Everyone already has to be able to receive. Since 1 January 2025, domestic businesses need to be able to receive an e-invoice. The BMF is explicit that there are no exceptions to this, and that it applies even to small businesses that are themselves exempt from issuing one. The bar is low: according to the BMF, an email inbox is enough.

A PDF is no longer an electronic invoice. Since 1 January 2025 an e-invoice exists only where the invoice is issued, transmitted and received in a structured electronic format that permits electronic processing. In plain terms, that is a data file a computer can read field by field, not a picture of an invoice. A simple PDF does not qualify and is classed as a “sonstige Rechnung”, or other invoice, alongside paper.

Sending is still optional, for now. Transitional rules let issuers keep using other invoice formats. Paper can always be used. Another electronic format, such as a PDF by email, needs the recipient’s agreement, on the basis that a recipient cannot be expected to accept a format entirely unknown to them.

What sits outside the obligation

Not every invoice is caught. The BMF lists several categories where the e-invoicing obligation does not apply at all, which is worth checking before assuming a wholesale system change is needed. Small-value invoices in particular cover a large share of transaction volume in some businesses.

The date that matters: 1 January 2027

The transitional rules run out in stages, and the statute behind them is section 27(38) of the German VAT Act.

Three details in the statute that are easy to miss

First, the general transitional rule has two conditions, not one. An invoice can still be sent on paper until 31 December 2026, or in another electronic format if the recipient agrees. That only holds for a supply carried out before 1 January 2027, meaning the goods were delivered or the service performed before that date. Both the supply and the invoice have to fall inside the window.

Second, the EUR 800,000 test looks backwards and uses a VAT definition. The extension into 2027 applies where the issuer’s total turnover, as defined in section 19(2) of the VAT Act, did not exceed EUR 800,000 in the preceding calendar year. It is not a headcount test, and it is not measured on the current year.

Third, the dates have not moved. They are written into the Act, and as at the date of publication the Act has not been amended to change them. If you are close to the threshold, or if you simply do not want to run two invoicing processes side by side, the sensible planning assumption is 1 January 2027. Our Germany e-invoicing guide sets out the mandate end to end, including the public sector (B2G) rules this article does not cover.

What the BMF has clarified since

The BMF issued a second guidance letter on 15 October 2025, amending its original letter of October 2024. Importantly, it wrote the rules into the VAT Application Decree, the rulebook that tax offices work from. It then updated its public FAQ, currently dated March 2026. Between them, four clarifications will affect day to day work.

Everything mandatory has to be in the structured data

This is the one that catches people out. The BMF states that every detail VAT law requires on an invoice must sit in the structured part of the e-invoice. That covers items such as the VAT number, the invoice date and the amounts. The reasoning is simple: only then can the invoice be processed automatically. A reference in the structured data pointing to an attachment that holds those details in unstructured form is not sufficient.

Supplementary information can still go in an attachment. The BMF gives the example of a breakdown of timesheets as a PDF. The description of the supply in the structured data has to allow the supply to be identified clearly and easily checked.

There is a specific allowance for construction. For a construction service, the BMF currently accepts a structured description that lists the individual trades with their totals. The detailed breakdown can then sit in a human-readable annex, provided the structured part points to it unambiguously.

With hybrid invoices, the data wins

This reverses long standing practice. Previously, where a hybrid format such as ZUGFeRD, in which the data file travels inside a PDF, showed a difference between the data and the readable image, the image took priority. The BMF confirms that the relationship has now flipped: the structured data is the leading part, and where the two differ, the structured data governs.

Corrections and retention

Where there is an obligation to issue an e-invoice, a correction has to be made as an e-invoice too, using the invoice type designated for a correction. During the transitional periods, a correction can still be made without using an e-invoice. The BMF also allows corrections of individual items to be made in a following e-invoice, provided the correcting document refers specifically and unambiguously to the original.

On retention, a business has to keep a copy of every incoming and outgoing invoice for eight years. For an e-invoice, at least the structured part has to be kept intact in its original form. GoBD are the German rules on keeping books and records digitally. The BMF adds that storing e-invoices outside a GoBD-compliant system does not, on its own, generally breach the retention requirement for VAT purposes. The BStBK FAQ translation goes into the archiving mechanics in more detail.

What happens if you get it wrong

The headline number is a fine of up to EUR 5,000. Under the German VAT Act it is an administrative offence to fail to issue an invoice, or to issue one late, where the law requires one. The ceiling for that offence is EUR 5,000. The same ceiling applies to a failure to keep an invoice for the eight-year period.

For most businesses the bigger exposure is elsewhere. Your customers can only reclaim the VAT on your invoice if it is a proper invoice. The BMF notes that as long as an “other invoice” may still be issued, it continues to count as a proper invoice for that purpose. That protection is tied to the transitional rules, so it narrows as they expire. In other words, your customers acquire a direct financial interest in your invoice being correct, which tends to concentrate minds faster than any fine.

There is also a contractual angle that rarely gets attention. Many supply agreements and standard terms still specify that invoices will be sent by post or as a PDF by email. Those clauses are worth reviewing before the obligation bites.

The second clock: the standard itself is changing

This is the part almost nobody has planned for. XRechnung is maintained by the Coordination Office for IT Standards (KoSIT) on behalf of the IT Planning Council. The version currently in force is XRechnung 3.0, with the technical package (bundle 3.0.2) most recently updated on 31 January 2026. That is what companies going live in January 2027 will be building against.

In an update published on 1 September 2026, KoSIT set out what happens next. The revised European standard, EN 16931-1:2026, has been ratified and has been available in English since March 2026, with the German translation due from DIN by 30 September 2026 at the latest. On the German side, KoSIT expects a preliminary version of the XRechnung 4.0 specification in September 2026, explicitly not for productive use, to give an early view of what is changing. The full technical package depends on further work at European level, since the files software needs to build and test against the new standard are still outstanding.

The timing point that matters for planning is this. KoSIT states that the existing and new versions of EN 16931-1 are expected to run in parallel until March 2029. The exact transition periods for XRechnung will be set within that window and announced when the 4.0 package is published. Read together, that means a German company hitting the 2027 deadline will go live on one version of the standard and migrate to another within the following two years.

The third clock: your customers abroad are already there

Germany’s approach is deliberately open on how an invoice travels. The BMF says the law prescribes no particular transmission route. Its list of possibilities runs from email and an electronic interface to shared access to a central storage location within a group, handover on a USB stick, and download from an internet portal. The route in any given case is a commercial matter between the parties.

Germany’s neighbours have taken a different path. Belgium made structured e-invoicing compulsory between Belgian VAT-registered businesses on 1 January 2026. The Belgian Federal Public Service Finance states that those invoices have to be sent systematically via the Peppol network, with Peppol BIS as the principal reference. The general tolerance period for the first three months of 2026 has ended, with a narrower and temporary tolerance for self-billing that ran to 30 June 2026.

France started on 1 September 2026. Businesses have to use an approved platform, a plateforme agréée, to transmit and receive their electronic invoices and to send transaction and payment data to the administration. Receiving is the universal obligation from that date; issuing applies from 1 September 2026 to large and mid-sized enterprises, and from 1 September 2027 to SMEs and micro-enterprises. The French tax administration’s July 2026 start-up guide states that during the start-up phase, sanctions will not be applied to businesses that encounter difficulties but are on a serious path to compliance. The same guide says this is neither a postponement nor a suspension of the obligation. The date held; what is on offer is patience with documented effort rather than more time.

And then the European layer

The EU’s VAT in the Digital Age package was adopted on 11 March 2025 and is being rolled out progressively until January 2035. The European Commission confirms that digital reporting requirements will affect cross-border B2B transactions from 1 July 2030. By 1 January 2035, Member States that run a domestic real-time reporting obligation have to align their systems with the EU standards.

Germany has been open about where this is heading. The BMF states that a reporting system is closely connected to the introduction of mandatory e-invoicing. Planned for a later date, it would report certain invoice details electronically to the tax administration, transaction by transaction and close to the time of issue. It adds that e-invoicing prepares the ground for that system, and that the government will propose the necessary legislative changes in due course. The current rules will then be reviewed and adjusted where necessary against the requirements of the reporting system. The BMF’s July 2026 Action Plan against tax and financial crime is covered separately.

That last sentence is the honest answer to the question of whether 2027 is the end of the road. It is not.

What to do in the next twelve months

The work divides into three kinds: establishing which wave you are in, fixing what your systems actually produce, and dealing with the parts of the problem that sit outside Germany. In rough order of urgency: