Compliance Alert – Decision proposal on introducing e-invoicing obligation from January 2025

Update: Compliance Alert - Decision proposal on introducing e-invoicing obligation from January 2025
Date: 2023-06-27

According to the proposal, Germany would receive a Derogation implementing e-invoicing in the business sector, which should be valid from January 2025 to December 2027 (or when the ViDA proposal is valid).

Taxpayers established in Germany will be required to issue e-invoices and report to the tax authorities. At the same time, B2G e-invoicing has been mandatory since November 2020.

The implementation will be introduced gradually by first mandating the issuance of e-invoices and later their submission to the government through the national reporting system. The Federal Government aims to ensure the national reporting system is in line with the ViDA reform and to synchronize the structures of both systems to avoid duplication of efforts.

Scope of the obligation

Businesses established in Germany will be obliged to issue e-invoices.
The demands of small businesses will be considered in the design of national provisions, for instance, by setting thresholds of company sizes or invoice amounts in which the use of e-invoices may be optional for a certain period.

Outline of the e-invoicing system and format

The model envisaged by Germany is considered to be largely compliant with the VAT in the Digital Age proposal.

Invoice issuers will not need to send an invoice to the tax authorities for validation prior to delivery. The trading parties will manage the invoice exchange and distribution. Taxable persons must report necessary data (an invoice subset) to the tax administration in a structured manner. The German government will accept a format that complies with EN 16931.

After collecting the data, tax authorities can cross-check with the information in VAT returns to combat tax fraud.

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