Germany Issues Second Draft Letter on E-Invoicing Requirements

On June 25, 2025, Germany’s Federal Ministry of Finance (BMF) released a second draft letter addressing upcoming e-invoicing requirements. This updated draft modifies the VAT Application Decree (UStAE) and provides additional guidance to help businesses prepare for mandatory electronic invoicing rules, set to take effect on January 1, 2025. The draft is open for consultation and feedback through industry associations.

Background and Scope

This second draft follows consultations with both federal and regional tax authorities. Recognizing the broader economic impact, the BMF has made the document publicly available and distributed it to industry bodies for commentary. Stakeholders are encouraged to provide input via their respective associations.

E-Invoice Compliance and Validation Requirements

Any formatting errors may result in an e-invoice being reclassified as an “other invoice,” thus rendering it non-compliant. Similarly, if required data is missing from the structured section of the invoice, it will be deemed invalid. Merely including mandatory information in attachments is not sufficient.

Furthermore, any corrections to an invoice must be issued in the same format as the original invoice (e.g., as a digital credit note). Therefore, an e-invoice can only be corrected by another e-invoice.

To ensure compliance with the European Norm (EN) 16931 standard, the BMF recommends the use of validation tools.

Exemptions and Consent Rules

The obligation does not apply to low-value invoices (under EUR 250), transportation tickets, or invoices issued by small businesses. In these cases, e-invoices may still be used without prior recipient consent. Meanwhile, e-invoices issued in B2C transactions require the consumer’s explicit prior agreement.

Archiving Obligations

The structured portion of an e-invoice must be archived in its original form for a minimum of eight years. Businesses must ensure the invoice’s authenticity, integrity, and readability throughout the retention period, either through internal controls or the use of secure technologies such as electronic signatures or Electronic Data Interchange (EDI).

Revisions to the VAT Implementation Decree

• Clarified Definitions: The terminology has been revised to clearly distinguish between electronic invoices and “other invoices,” structured formats, and EU standards.
• Expanded E-Invoicing Obligations: Several provisions now explicitly cover mandatory e-invoicing for services related to real estate, credit notes, and invoice corrections.
• Hybrid Invoice Requirements: For invoices that contain both a visual component (e.g., PDF) and structured data (e.g., XML), the information in both parts must be identical.
• Input Tax Deduction: Tax deductions are allowed only for invoices that comply fully with applicable legal requirements. For transactions subject to mandatory e-invoicing, this means that the invoice must meet all conditions outlined in Articles 14 and 14a of the German VAT Act.

Special Provisions

The draft also addresses invoicing procedures in more complex contexts, including insolvency cases and joint ownership arrangements. It provides rules for correcting and replacing invoices, with particular consideration given to notarial services and financial institutions.

The guidance provided in this draft will apply to all transactions executed from January 1, 2025, onward. A final version of the BMF’s letter is anticipated in the fourth quarter of 2025, following the conclusion of the consultation process.

There’s more you should know about e-invoicing in Germany – learn more about the new and upcoming regulations.