Germany is approaching a significant milestone in its transition to mandatory electronic invoicing. From 1 January 2027, businesses with a total turnover exceeding EUR 800,000 in 2026 will generally be required to issue electronic invoices for domestic business-to-business (B2B) transactions falling within the scope of the new rules. This development is particularly relevant for companies operating in Germany, as it affects accounting procedures, commercial agreements and electronic document management systems.
Under the German Value Added Tax Act (Umsatzsteuergesetz – UStG), electronic invoicing is being introduced progressively for B2B transactions. Although the transition began on 1 January 2025, the obligation to issue electronic invoices will expand further in 2027 and 2028.
When Does Mandatory E-Invoicing Take Effect in Germany?
Germany’s new electronic invoicing framework has applied since 1 January 2025. However, the legislature has introduced transitional arrangements to allow businesses sufficient time to adapt their invoicing processes and technical systems.
1 January 2025: Businesses established in Germany became required to be capable of receiving electronic invoices within the scope of the legislation. Transitional provisions continued to apply to the obligation to issue electronic invoices.
1 January 2027: The general transitional relief will cease to apply to businesses whose total turnover in the preceding calendar year exceeded EUR 800,000. Subject to statutory exceptions and specific transitional provisions, these businesses will be required to issue electronic invoices for qualifying domestic B2B transactions.
1 January 2028: Following the expiry of the general transitional arrangements, the electronic invoicing obligation will extend to other businesses falling within the scope of the legislation.
These dates are based on the obligations and transitional provisions laid down in Sections 14 and 27(38) of the German Value Added Tax Act (UStG).
Which Companies Must Issue Electronic Invoices in 2027?
The application of the electronic invoicing obligation from 1 January 2027 will depend on the issuing business’s total turnover during the 2026 calendar year.
Businesses whose total turnover in the preceding calendar year exceeded EUR 800,000 will generally be required to issue electronic invoices for qualifying transactions between businesses established in Germany.
By contrast, businesses with total turnover of EUR 800,000 or less in the preceding calendar year may continue to benefit from the transitional provisions until 31 December 2027, subject to the applicable conditions.
A separate transitional arrangement also permits certain invoices issued through Electronic Data Interchange (EDI) systems that do not yet meet the new electronic invoicing format requirements to continue to be used until the end of 2027.
Nevertheless, the electronic invoicing obligation does not apply to every category of transaction. Specific rules and exceptions apply, including to certain VAT-exempt transactions, invoices with a total amount not exceeding EUR 250, invoices issued by businesses benefiting from the small-business VAT exemption (Kleinunternehmerregelung), and certain transport tickets.
What Qualifies as an Electronic Invoice? Is a PDF Sufficient?
Under the revised German legislation, an electronic invoice (E-Rechnung) is an invoice issued, transmitted and received in a structured electronic format that enables electronic processing.
Consequently, a conventional PDF invoice sent by email does not, by itself, qualify as an electronic invoice under the new framework.
As a general rule, electronic invoices must comply with the European standard EN 16931. Common formats used in Germany include XRechnung and versions of ZUGFeRD that satisfy the applicable technical requirements.
Other structured electronic formats agreed between the parties may also be used, provided that the statutory conditions are met.
Businesses should therefore not assume that their existing invoicing software complies with the new requirements merely because it can generate and transmit PDF invoices.
Receiving and Retaining Electronic Invoices
Since 1 January 2025, businesses established in Germany have generally been required to be capable of receiving electronic invoices. The transitional periods applicable to issuing electronic invoices do not extend to this receiving obligation.
According to the German Federal Ministry of Finance, an appropriate email address may be sufficient to enable a business to receive electronic invoices. However, businesses must also ensure that invoices are retained in accordance with applicable legal requirements and remain accessible when required.
Under Section 14b of the German Value Added Tax Act, invoices are generally subject to an eight-year retention period.
At a minimum, the structured data component of an electronic invoice must be retained in its original form, with its integrity preserved.
Businesses should therefore review their electronic invoice receipt, processing and archiving procedures alongside their existing accounting and document management systems.
Legal Implications for Foreign Companies and International Corporate Groups
Germany’s electronic invoicing requirements are not limited to companies with German shareholders. Foreign-owned businesses established in Germany, or operating through a fixed establishment involved in the relevant transactions, may also fall within the scope of the legislation.
In this context, the nationality of a company’s shareholders or the location of its registered office is not necessarily decisive. The relevant considerations include whether the business is regarded as established in Germany for VAT purposes and the nature of the transaction concerned.
Foreign companies that are merely registered for VAT in Germany, without having a relevant establishment in the country, are not automatically subject to the domestic electronic invoicing obligation solely by virtue of that registration.
For international corporate groups, the new requirements may also necessitate a review of intragroup invoicing procedures, service and supply agreements, centralised accounting systems and arrangements governing the exchange of electronic data.
Companies conducting business between Türkiye and Germany should pay particular attention to whether their transactions fall within the scope of Germany’s mandatory electronic invoicing framework, taking into account their specific corporate structures and business activities.
What Should Companies Do Before 1 January 2027?
The transition to mandatory electronic invoicing should not be regarded merely as a technical software upgrade. The new framework also affects businesses’ tax compliance obligations, commercial contracts and document management procedures.
Businesses should first assess their total turnover for 2026 to determine when their obligation to issue electronic invoices will become applicable.
They should then examine whether their existing accounting and invoicing systems support the structured electronic formats required under the legislation.
Contractual provisions governing the issuance and transmission of invoices, agreements with service providers and the allocation of internal responsibilities should also be reviewed in light of the new requirements.
In addition, businesses should establish appropriate internal procedures for receiving, validating, retaining and correcting electronic invoices.
Delays in implementing the electronic invoicing requirements may increase the risk of non-compliant invoices and associated tax-related or contractual disputes.
How Can NZP NAGY LEGAL Assist?
NZP NAGY LEGAL provides legal advice to German and international companies on matters relating to commercial transactions, contractual obligations and regulatory compliance.
In connection with the transition to mandatory electronic invoicing, we assist businesses in assessing their legal obligations, reviewing commercial agreements, examining arrangements with service providers and coordinating legal matters arising from international corporate structures.
Combining our legal expertise in Germany with the local knowledge of our Turkish-qualified lawyers and more than 25 years of international experience, we provide coordinated cross-border legal advice to companies operating between Germany and Türkiye.
Is your business prepared for the new obligations taking effect on 1 January 2027? Contact NZP NAGY LEGAL to discuss the legal implications of the electronic invoicing requirements for your business and the steps necessary to prepare for compliance.
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