Ina Reese Tax & Legal Practice – Flensburg | Harrislee

E‑invoicing from 2027

Law & Taxation Reese Flensburg
22.10.2026
General information
E‑invoice: 800,000 euros, E‑invoice archiving, E‑invoice transition period, E‑invoice: input tax deduction, Deadlines and formats, Deadlines, formats, input VAT, Mandatory deadlines, Requirements, Deadlines, Formats, Company Obligation, Companies Obligations Deadlines, XInvoice, ZUGFeRD

From 1 January 2027, businesses with a turnover of more than 800,000 euros in the previous year will be required to issue e‑invoices. What this means in terms of formats, input VAT, archiving and contracts, and what needs to be done by the end of the year.

E‑invoicing from 2027

E‑invoicing from 2027: What businesses need to do now to make the switch

Since January 2025, all businesses in Germany have been required to be able to receive electronic invoices. This has made little difference to many businesses, as most suppliers were still permitted to send PDF invoices. On 1 January 2027, this grace period will end for a large proportion of small and medium-sized enterprises: any business with a turnover of more than 800,000 euros in 2026 will be required to issue e‑invoices from that date onwards. A PDF file is not an e‑invoice.

This leaves less than three months to complete the transition. According to a YouGov survey commissioned by an invoicing software provider in June 2026, 29 per cent of the companies surveyed had not yet started or were only just beginning to plan. E‑invoicing is not just a matter of software. It affects input tax deduction, archiving and contracts with customers and suppliers.

An overview of the timetable

Period	Reception	Exhibition
since 1 January 2025	All businesses must be able to receive e‑invoices.	Paper copies are permitted; PDFs are permitted with the recipient’s consent
2026	as before	as before
2027	as before	E‑invoicing will be mandatory for businesses with a total turnover exceeding 800,000 euros in 2026; otherwise, paper invoices and, with consent, PDF invoices will continue to be permitted
until 31 December 2027		EDI procedures remain permissible with consent, even above the turnover threshold
from 1 January 2028		E‑invoicing is compulsory for everyone (see below for exceptions)

The obligation applies to invoices between businesses that are both resident in Germany (Section 14(2) of the Value Added Tax Act (UStG)). The transitional provisions are set out in Section 27(38) of the UStG. They are based not on the invoice date, but on the date on which the service was provided: For a supply made in December 2026, a paper or PDF invoice may still be issued in January 2027. There are no plans to postpone this: the draft of the Annual Tax Act 2026 leaves the deadlines and turnover threshold unchanged.

Which turnover counts?

The decisive factor is the total turnover of the issuer of the invoice in 2026 (Section 19(2) of the Value Added Tax Act). This is the sum of taxable turnover based on payments received. Certain tax-exempt turnover, such as that from tax-exempt lettings, is deducted. Sales of fixed assets are not taken into account. Anyone who is just below the threshold should extrapolate their 2026 turnover now. In any case, anyone is free to switch voluntarily: e‑invoices between domestic companies do not require the recipient’s consent even today.

Smaller businesses are also affected

The turnover threshold applies only to invoicing. A craft business with a turnover of 400,000 euros may continue to issue paper invoices in 2027 or, with the recipient’s consent, PDF invoices. However, from 2027 onwards, its larger suppliers will send it e‑invoices, which it must process, check and archive correctly. From 2028, it must also issue them itself.

What an e‑invoice is – and what it isn’t

An e‑invoice is an invoice in a structured electronic format that enables automatic processing (Section 14(1) of the German Value Added Tax Act (UStG)). The format must, in principle, comply with the European standard EN 16931. Other formats are only permitted if the parties agree to them and the information can be fully converted into a standard-compliant format (Section 14(1), sentence 6, no. 2 of the German Value Added Tax Act (UStG)). In Germany, two formats are commonly used in practice:

XRechnung: a plain XML file that is virtually unreadable to humans without the appropriate software.
ZUGFeRD from version 2.0.1 onwards: a hybrid format comprising a PDF and an embedded XML file. The MINIMUM and BASIC-WL profiles are not sufficient.

A PDF file, a scanned paper invoice or a Word file are not e‑invoices, but „other invoices“. This also applies if they are sent by email.

What matters when it comes to content

All mandatory details on an invoice must be included in the structured XML section. A link to a customer portal is not sufficient. Attachments are intended solely for supplementary information, such as a timesheet.

In the case of hybrid formats such as ZUGFeRD, the XML section takes precedence. If the visible PDF view differs from the data record, the data record takes precedence. If the PDF view contains differing invoice details, such as a different tax amount, it may be regarded as a second invoice on which VAT is payable in accordance with Section 14c of the German VAT Act (UStG). Minor technical discrepancies, such as rounding differences, are not objected to by the tax authorities. Anyone who has previously drawn up their invoices in Word cannot generate an e‑invoice from them. Software is required that creates the data record directly from the accounting data.

How e‑invoices are delivered

The law does not stipulate a specific method of transmission. Sending by email is sufficient, as is using a portal or a direct interface. An email inbox is sufficient for receiving them. Having a separate inbox solely for e‑invoices is not mandatory, but it makes sense in practice.

Exceptions to the obligation

An e‑invoice is not required in the following cases:

Small-value invoices up to 250 euros gross and Tickets,
Small business owners as invoice issuers (they still have to receive e‑invoices),
Invoices to Private customers,
tax-free turnover pursuant to Section 4(8) to (29) of the German Value Added Tax Act (UStG), for example the tax-exempt letting of commercial premises,
Invoices to customers or from suppliers abroad,
Invoices to Associations and other legal entities, who are not acting as business owners.

Conversely, the obligation also applies in situations where one might not immediately expect it: for credit notes, for cash purchases exceeding 250 euros, for construction work subject to the reverse charge mechanism (Section 13b of the German Value Added Tax Act (UStG)), and for the letting of commercial premises where the landlord has opted to be liable for VAT (Section 9 of the German Value Added Tax Act (UStG)).

There is a simplification for tenancy agreements and other continuing contractual relationships subject to VAT. In such cases, a single e‑invoice for the first period is sufficient, which then serves as a standing invoice. Recurring invoices that have been lawfully issued on paper or as a PDF – such as a tenancy agreement containing all the necessary billing details – remain valid as long as the details do not change. If they do change – for example, in the event of a rent increase – a new e‑invoice is required. Find out more about commercial tenancies on our page at Tenancy law.

Input VAT deduction: The consequences of using the wrong format

For invoice recipients, one question stands out above all others: what happens if a supplier still sends a PDF invoice in 2027, despite the obligation? There is also a practical problem. Whether a supplier will still be permitted to send PDF invoices in 2027 depends on their turnover in 2026, which the customer is generally unaware of. To date, there has been no statement from the tax authorities regarding the protection of legitimate expectations in such cases.

According to the latest letter from the Federal Ministry of Finance (BMF) dated 15 October 2025, such an invoice is not a valid invoice and, in principle, does not entitle the recipient to a deduction of input VAT. However, the tax authorities allow for a second option: the business owner may demonstrate that the substantive requirements for input tax deduction are met. In the case of a PDF invoice that is factually correct and complete, the BMF considers these requirements to be met as a matter of course. This clarification is often omitted from many explanations.

This does not mean the all-clear has been given. Anyone who has to rely on providing supporting evidence will find themselves having to argue their case during a tax audit, rather than simply presenting a proper invoice. It is safer to request a correct e‑invoice from the supplier. A correction is made by means of an e‑invoice that clearly references the original invoice. It has retroactive effect if the original invoice already contained the issuer, recipient, service, consideration and tax amount.

Format, business rule, content

The Federal Ministry of Finance distinguishes between three types of errors. One Formatting error occurs when the file does not comply with the standard. In that case, it is not an e‑invoice. A breach of a Business rule For VAT purposes, the standard is only relevant where mandatory information is concerned. Errors in content, such as an incorrect tax rate, must be assessed in the same way as any other invoice. The recipient may rely on a technical validation report, provided they exercise due commercial care. It does not replace a substantive check of the invoice.

Fine for the exhibitor

Anyone who fails to issue an invoice despite being obliged to do so risks a fine of up to 5,000 euros (Section 26a of the German Value Added Tax Act (UStG)). Whether an invoice in the wrong format also falls under this provision is a matter of debate in the specialist literature.

Archiving: Your email inbox is not an archive

E‑invoices must be retained for eight years (Section 14b of the German Value Added Tax Act (UStG), Section 147 of the German Fiscal Code (AO)). The structured data record must be retained in its original form, unaltered and in a machine-readable format. A printout is not sufficient. Since the amendment to the GoBD in July 2025, the XML file is generally sufficient for hybrid formats. The PDF version only needs to be retained in addition if it contains further tax-relevant information.

An email inbox is suitable as an input channel, but is generally not suitable as an archive. The GoBD require that documents be stored in a way that ensures they are unalterable, complete and retrievable at any time. An inbox in which staff can move and delete emails does not reliably meet these requirements.

How e‑invoicing changes the law of contracts

E‑invoicing is a matter of VAT law with implications under civil law. It raises questions regarding when an invoice is deemed to have been received, when payments become due, and what is stipulated in framework agreements and general terms and conditions.

Right to a proper invoice

If the supplier is obliged under VAT law to issue an invoice, their customer has a civil law claim to receive one. In the view of the tax authorities, this also applies even if a data record that has been transmitted does not meet the requirements for an e‑invoice. According to the case law of the Federal Court of Justice, the recipient may withhold payment until they receive a valid invoice (Federal Court of Justice, judgement of 26 June 2014, VII ZR 247/13). Whether this will also apply from 2027 onwards, when a PDF invoice with correct content replaces the e‑invoice, has not been clarified by the highest court.

The invoice is also important in the event of late payment: in commercial transactions, payment is deemed to be in arrears no later than 30 days after the due date and receipt of the invoice (Section 286(3) of the German Civil Code (BGB)). Whether a VAT-compliant invoice is required for this purpose is also an open question. Anyone wishing to avoid disputes over late payment and interest on arrears should issue the invoice in the correct format.

No entitlement to a paper copy

Conversely, once the obligation comes into force, a recipient may no longer request a paper or PDF invoice. If they refuse to accept the e‑invoice, the issuer has fulfilled their obligation provided they can demonstrate that they made a genuine effort to send it. Such a refusal does not exempt the customer from their obligation to pay.

Check contracts and terms and conditions

Many framework agreements, purchasing terms and conditions, and general terms and conditions contain clauses such as „Invoices must be sent in paper form“ or „Invoices must be sent as PDF files to the following address“. From 2027, such clauses will be unlawful for many businesses. The format and method of transmission should therefore be renegotiated: which format, to which email address or via which portal, and who is responsible in the event of technical problems. For existing contracts, a brief supplementary agreement is often sufficient for this purpose.

Schedule for the coming weeks

Project revenue for 2026. If it exceeds 800,000 euros, the certificate must be issued from January 2027.
Check the software. Can the accounting or stock management programme generate XRechnung or ZUGFeRD in the permitted format and read incoming e‑invoices?
Maintain master data. A billing address is required for every business customer. Invoices sent to public sector clients usually also require a routing ID.
Amend contracts and terms and conditions. Check the clauses relating to the format and address for invoices and agree them with key customers and suppliers.
Organise the incoming goods inspection. Who checks incoming e‑invoices for technical accuracy and content, and how are incorrect invoices rejected?
Set up an archive. The XML files must be stored in an unaltered form and in compliance with GoBD.
Trial run in 2026. E‑invoices are already permitted without consent. A trial involving a number of regular customers will highlight any issues before the requirement comes into force.

Outlook: The next stage is due in 2030

At European level, the next step has already been decided. Under the „VAT in the Digital Age“ (ViDA) package of measures, e‑invoicing will also become mandatory from 1 July 2030 for supplies of goods and services to businesses in other EU Member States. Invoices must then be issued within ten days, and the data will be reported digitally to the tax authorities. A German reporting system has been announced, though no date has yet been set. Those who make a smooth transition now will lay the foundations for this.

Legal and tax services under one roof

E‑invoicing is often treated as purely an IT project. However, it is VAT rules that determine whether input tax is recoverable, and civil law issues that determine whether invoices are paid on time.

Ina Reese is a solicitor, a specialist in tax law and a tax adviser. As part of our Tax advice We will clarify when the obligation comes into effect for your company, which exemptions apply, and how the receipt and archiving of invoices should be organised. We will adapt framework agreements, terms and conditions of purchase and general terms and conditions in the Commercial and Company Law to the new requirements. In the event of late payment, our Credit management.

Frequently asked questions about e‑invoicing

Is a PDF invoice sent by email an e‑invoice?

No. A PDF file is not a structured format, even if it is sent electronically. E‑invoices are generally formats that comply with the EN 16931 standard; in Germany, these are primarily XRechnung and ZUGFeRD from version 2.0.1 onwards.

My turnover is less than 800,000 euros. Do I need to do anything in 2027?

You must be able to receive and properly archive e‑invoices from 2025 onwards. In 2027, you may still issue paper invoices and, with the recipient’s consent, PDF invoices, provided your total turnover in 2026 does not exceed 800,000 euros. From 1 January 2028, this requirement will also apply to you.

Does this obligation apply to small business owners?

Small businesses as defined in Section 19 of the German Value Added Tax Act (UStG) are not required to issue e‑invoices. However, like all other businesses, they must accept e‑invoices.

What will happen if my supplier continues to send PDF invoices in 2027?

If the supplier is obliged to issue an e‑invoice, a PDF invoice does not constitute a valid invoice. However, according to the tax authorities, you may still be entitled to claim input tax deduction by demonstrating that the substantive requirements are met, provided the invoice is accurate and complete in terms of its content. It is safer to request a correct e‑invoice. You have a civil law right to do so.

In summary

From 2025, all businesses must be able to receive e‑invoices.
From 1 January 2027, companies with a total turnover of more than 800,000 euros in 2026 must issue e‑invoices; from 2028, this will apply to all companies as a general rule.
PDF invoices are not e‑invoices. XRechnung and ZUGFeRD (version 2.0.1 or later) with the appropriate profiles are commonly used.
Issuing a PDF invoice, despite it being mandatory, jeopardises the right to deduct input VAT, even if the Federal Ministry of Finance (BMF) permits an alternative method of providing evidence.
The XML data record must be retained unchanged for eight years and must comply with GoBD requirements.
Clauses relating to the format and address for invoices in contracts and terms and conditions should be amended before 2027.

Would you like to know when e‑invoicing becomes compulsory for your business? During an initial consultation lasting around 15 minutes, we’ll assess where you’re at and what needs to be done before the end of the year. Get in touch now