Mandatory B2G e-invoicing
Since 2018, German federal states have been required to accept electronic invoices, in accordance with European Directive 2014/55/EU.
This means that public entities must accept e-invoices, but they have also continued to accept other invoice formats such as PDF. However, some German federal states, including the Federal State (Bundesland) and the state of Bremen, have taken it a step further and made it mandatory for their providers to issue invoices in electronic format.
Currently, e-invoicing is mandatory when invoicing the Federal State and the state of Bremen, and other states such as Baden-Württemberg, Rhineland-Palatinate, Saarland, Mecklenburg-Western Pomerania, and Hamburg are following this path.
How it works
The German e-invoicing system is decentralized and operates through the Peppol network. At the national level, the Central Invoice Submission Portal (Zentrales Rechnungseingangsportal des Bundes, or ZRE) serves as the access point for suppliers to submit e-invoices. Each state at the federal level can choose to use the central government's platform or other systems.
The accepted e-invoice formats are XRechnung and ZUGFeRD 2.1. XRechnung is an XML document that conforms to EU requirements. ZUGFeRD (Zentraler User Guide des Forum elektronische Rechnung Deutschland) is a hybrid format that consists of an A3 PDF with embedded XML, meeting European standards.
Germany has also announced a timeline to make electronic invoicing mandatory in business-to-business (B2B) transactions.