Newsletter Abstract

E-Invoicing in Germany from 2025: Global Momentum and EU Digital VAT Reform
Germany has introduced e-invoicing for B2B transactions starting January 1, 2025—part of a global trend toward real-time digital tax systems. This article outlines Germany’s implementation timeline, technical requirements, and broader implications, with special attention to the EU’s “VAT in the Digital Age” (ViDA) initiative and including other international examples. For businesses and accountants, the shift represents both a regulatory challenge and a strategic opportunity.

Full Article

Germany is preparing to enter a new phase of digital tax compliance. From January 1, 2025, all businesses operating in Germany must be capable of receiving structured electronic invoices. Over the following three years, the obligation to issue e-invoices will be phased in, with all B2B transactions to be conducted via compliant formats by 2028. Exceptions apply only to low-value invoices (under € 250) and most B2C transactions. This transformation, enacted under the Growth Opportunities Act, aligns Germany with broader global efforts to modernize VAT administration through technology.

The legal and technical core of this reform lies in structured electronic invoicing. An e-invoice, under EU Directive 2014/55/EU, is not simply a digital document but a machine-readable file (typically in XML format) that allows for automatic processing by enterprise systems. Unlike Italy or Poland, Germany does not plan to introduce a central platform for invoice submission; instead, businesses will exchange e-invoices directly, using email, portals, or Electronic Data Interchange (EDI), provided the data structure is compliant.

Germany's move must be viewed in the context of a rapidly evolving global landscape. Many economies have embraced e-invoicing as a cornerstone of tax reform.

Latin American countries led the way—Mexico’s CFDI system, Brazil’s NF-e, and Chile’s electronic invoicing network have demonstrated how digital invoicing can dramatically reduce VAT evasion and increase tax revenues. Brazil, for example, reported a $ 58 billion USD gain in tax compliance after the implementation of e-invoicing systems.

Saudi Arabia and the UAE are phasing in mandates. Malaysia is rolling out its system for companies exceeding MYR 100 million in revenue. Singapore, Thailand, and Vietnam have introduced models based on the PEPPOL framework or their own localized platforms.

Within the European Union, the “VAT in the Digital Age” (ViDA) initiative aims to harmonize these efforts by introducing mandatory digital reporting and cross-border interoperability. ViDA envisions a future in which e-invoicing becomes the standard across all member states, with common standards and real-time data exchange between national tax authorities. Its objectives include minimizing the VAT gap, increasing efficiency for businesses, and enhancing cooperation among EU tax administrations. Although the ViDA legislative package has not yet been fully adopted—due in part to a lack of unanimous agreement at the ECOFIN meeting in June 2024—many EU countries have already begun implementing the foundational elements: for example Italy mandates centralized invoice routing through its SdI platform and Poland’s KSeF platform adds another layer of tax authority integration by requiring invoice validation with digital signatures. National legislation is thus running ahead of full EU consensus.

These developments point to a universal trend: the transition from periodic tax reporting to real-time or continuous transaction control (CTC) models.
This regulatory evolution is not without its challenges. Businesses must upgrade ERP and accounting systems, integrate with new data formats, and ensure compliance with data protection regulation and archiving rules. Many companies will rely on third-party service providers to convert and transmit invoices in compliant formats, especially in multinational environments where dozens of ERP systems and invoice standards may coexist.

For internationally operating business, the stakes are high. E-invoicing is no longer a back-office IT issue—it is a tax governance and financial reporting issue. Advising clients on local and cross-border compliance strategies, facilitating the integration of technical systems, and ensuring legal soundness will be critical tasks. Tax advisors must also monitor changes across jurisdictions, as implementation timelines and format standards differ even within the EU.

At its core, this shift is more than compliance—it is a redefinition of how transactional tax data is captured, shared, and enforced. As governments begin to treat invoices as real-time data points rather than retrospective documents, the quality and timing of invoice reporting will become central to audit trails, tax assessments, and financial transparency.

Germany’s e-invoicing mandate, while slightly delayed compared to early adopters like Italy or Mexico, is a pivotal part of the global convergence toward digital VAT. It reflects a growing recognition that tax systems must be built on digital infrastructure that supports both automation and oversight. For global firms, this is an opportunity to future-proof compliance strategies while adding value through real-time financial insight and process optimization.

The coming years will require close coordination between IT departments, finance teams, and external advisors. For those who prepare early, the move to e-invoicing will not only satisfy a legal requirement—it will help unlock the full potential of digital financial operations.

The firm

Rentrop & Partner mbB is mid-sized public audit and tax advisory firm, based in Bonn, Germany. Established in 1955, the firm has over 70 years of experience, offering personalized and comprehensive solutions to a diverse clientele, including private individuals, SMEs, non-profit organizations, and subsidiaries of international corporations.

As a member of the global JPA International network, Rentrop & Partner combines regional expertise with international reach. Its services include statutory and voluntary audits, tax structuring, transfer pricing, compliance support, and guidance on cross-border matters. The firm also brings specialized knowledge in sectors such as healthcare, non-profits, and digital transformation.