E-invoicing · 9 min read
Germany's E-Invoicing Mandate 2025–2028: What Applies When for Freelancers and SMEs
Since 1 January 2025, invoices between businesses established in Germany fall under a mandatory e-invoicing regime. Many freelancers have barely noticed, because transitional rules allow paper and PDF invoices to be issued until the end of 2027. Those rules now expire in stages, and whether you have to switch in 2027 or only in 2028 depends on your turnover in 2026.
This guide sets out the timeline, explains what counts as an e-invoice, who is exempt and what happens when something goes wrong. It is based on sections 14 and 27(38) of the German VAT Act (UStG), sections 33 and 34a of the VAT Implementing Regulation (UStDV), and the Federal Ministry of Finance (BMF) letters of 15 October 2024 and 15 October 2025. Status: October 2026. For your own situation, a tax adviser remains the right point of contact.
What counts as an e-invoice, and what does not
Under section 14(1) UStG, an e-invoice is an invoice issued, transmitted and received in a structured electronic format that allows electronic processing. The format must comply with the European standard EN 16931, or be agreed between the parties as long as the required invoice details can be extracted correctly from it. Everything else, paper as well as a PDF, a Word document or a photo, is legally an other invoice (sonstige Rechnung).
A normal PDF sent by email is therefore not an e-invoice. The BMF explicitly names the XRechnung standard and the hybrid ZUGFeRD format from version 2.0.1 as permitted, except for the MINIMUM and BASIC-WL profiles, which do not contain the full invoice data. Other European formats that conform to EN 16931 are allowed as well. Which permitted format you use is a matter of contract between you and your customer, not of tax law.
- XRechnung: pure XML, readable for people only with a viewer
- ZUGFeRD / Factur-X: a PDF with embedded XML, readable and machine-processable
- Plain PDF, scan, paper: an other invoice, not an e-invoice
The timeline: 2025, 2027, 2028
Since 1 January 2025, every business established in Germany must be able to receive e-invoices. There is no transition period for receiving, and it applies to small businesses under the Kleinunternehmer rule too. An email inbox is enough; according to the BMF, a separate mailbox reserved for e-invoices is not required. A business that cannot or will not accept an e-invoice has no right to demand a paper or PDF version instead.
For supplies made in 2025 and 2026, you may still issue paper invoices. An invoice in another electronic format, such as a PDF, is also permitted but needs the recipient's consent, which requires no particular form and can also be given implicitly.
For supplies made in 2027, this relief only applies if your total turnover in the previous year, 2026, did not exceed €800,000. Regardless of turnover, invoices exchanged by EDI with the recipient's consent remain permitted during 2027. From 1 January 2028, all transitional rules end: invoices between domestic businesses must then be issued as e-invoices unless an exception applies.
- From 1 Jan 2025: every domestic business must be able to receive e-invoices
- Supplies in 2025 and 2026: paper, or PDF with consent, still allowed
- Supplies in 2027: paper or PDF only with prior-year turnover up to €800,000
- From 1 Jan 2028: e-invoices mandatory, no transitional relief
Who and what is exempt
The mandate covers only supplies between businesses that are both established in Germany. Invoices to consumers are not covered, and neither are supplies to customers abroad. Supplies that are VAT-exempt under section 4 nos. 8 to 29 UStG, such as letting a flat or many medical treatments, are excluded as well.
Three cases may always be invoiced as an other invoice under the UStDV: small-amount invoices up to €250 including VAT (section 33), travel tickets (section 34) and invoices from small businesses using the Kleinunternehmer scheme of section 19 UStG (section 34a). Small businesses therefore never have to issue e-invoices, but they must be able to receive them. Any of these invoices may voluntarily be issued as an e-invoice at any time, and that does not need the recipient's consent.
Conversely, the mandate applies even when your customer is itself a small business or only makes VAT-exempt supplies. It also covers self-billing credit notes and reverse-charge invoices under section 13b UStG when both parties are established in Germany.
Errors and what they mean for input VAT
The BMF letter of 15 October 2025 distinguishes two kinds of error. A format error means the file does not match a permitted syntax; it is then not an e-invoice at all but an other invoice. A business-rule error means information is missing or contradictory, for example a tax amount that does not match the stated rate. If such an error does not affect a mandatory VAT invoice detail, it is irrelevant for VAT purposes; the BMF's own example is a missing BT-10 buyer reference field.
If an other invoice is issued although an e-invoice was required, the BMF considers it not to be a proper invoice, so in principle it does not entitle the recipient to deduct input VAT. The deduction can still be allowed under section 15.2a(1a) of the VAT Application Decree (UStAE) if the substantive conditions are proven in another way, which according to the BMF will regularly be the case for an other invoice that is correct and complete in content. The cleaner route is to correct the invoice by issuing an e-invoice afterwards.
The BMF explicitly recommends checking e-invoices with a suitable validation application and keeping the validation report. Validation does not replace checking the content, though: a wrong VAT rate can be formally flawless.
Retention and a plan for switching over
Invoices must be kept for eight years under section 14b UStG. For an e-invoice, at least the structured part has to be preserved unaltered in its original form: the XML is the original, and a printed PDF is merely a view of it. Other rules, such as the German bookkeeping principles known as GoBD, apply alongside.
A simple order of steps works for most freelancers. First, make sure you can read incoming XRechnung files; Toolula's E-Invoice Reader displays XML and ZUGFeRD files as a normal invoice. Next, use your 2026 turnover to work out whether you must issue e-invoices from 2027 or from 2028, and ask your regular customers which format their systems process.
In the E-Invoicing Studio you enter seller, buyer and line items. Public-sector clients get a Leitweg-ID (BT-10) field, and small businesses can tick the Small business — § 19 UStG option. Missing mandatory fields are listed until the badge shows XRechnung 3.0 / ZUGFeRD validated. Export XML produces an XRechnung, Hybrid PDF a ZUGFeRD / Factur-X file in the EN 16931 profile. The studio's check covers the mandatory fields; for a formal validation report, use a full validator such as the one published by KoSIT, the coordinating body behind XRechnung.
Frequently asked questions
Do I have to issue e-invoices as a Kleinunternehmer?
No. Invoices from small businesses under section 19 UStG may always be issued as an other invoice under section 34a UStDV, so paper or PDF remains fine. You must, however, have been able to receive e-invoices since 1 January 2025.
Which turnover counts for the €800,000 threshold?
The total turnover as defined in section 19(2) UStG of the business issuing the invoice, in the previous calendar year. For invoices covering supplies made in 2027, your 2026 total turnover decides.
Is a PDF by email still enough?
For supplies in 2025 and 2026, yes, if the recipient agrees. For 2027, only if your previous-year turnover did not exceed €800,000. From 2028, a PDF is no longer a sufficient invoice between domestic businesses, except in the exempt cases such as small amounts up to €250.
Do I need special software or a separate inbox?
To receive e-invoices, an email inbox is enough; a separate mailbox is not required. You must be able to read the XML and archive it unaltered. To issue them, any tool that produces a permitted EN 16931 format will do.
Does the mandate apply to invoices to consumers or foreign customers?
No. It only covers supplies between businesses that are both established in Germany. Invoices to public authorities follow their own rules as well, usually XRechnung with a Leitweg-ID.