§14 UStG & Growth Opportunities Act: Simply Explained
Table of Contents
Section 14 of Germany's Value Added Tax Act (Umsatzsteuergesetz, or UStG) is the single most important provision governing invoice issuance in German tax law. In 2024, the Growth Opportunities Act (Wachstumschancengesetz) overhauled this section, fundamentally redefining what counts as an "electronic invoice." This guide walks you through every change, paragraph by paragraph.
Key Takeaways
What you need to know at a glance:
- Section 14 UStG governs who must issue invoices, what format they must take, and which fields they must contain.
- The Growth Opportunities Act (effective 28 March 2024) split the legal definition of "invoice" into two categories: "electronic invoice" (e-invoice) and "other invoice."
- An e-invoice must now use a structured electronic format compliant with European standard EN 16931; a simple PDF no longer qualifies.
- All German businesses have been required to receive e-invoices in B2B transactions since 1 January 2025.
- The mandatory invoice fields listed in Section 14(4) UStG remain unchanged; the law changes the format, not the content.
What Does Section 14 UStG Regulate?
Section 14 UStG (often written as "§14 UStG") is the cornerstone of German invoicing law. It answers three fundamental questions:
- Who must issue an invoice? Every entrepreneur (Unternehmer) who supplies taxable goods or services to another entrepreneur (B2B).
- What form must the invoice take? Since the Growth Opportunities Act, the law explicitly distinguishes between an "electronic invoice" and an "other invoice."
- What information must the invoice contain? Section 14(4) UStG provides an exhaustive list of mandatory fields.
🖼️ Visual placeholder: Numbered checklist card of the 11 mandatory §14(4) UStG invoice fields — supplier name/address, recipient name/address, tax number or VAT ID, invoice date, sequential number, quantity/nature of goods, date of supply, net per tax rate, tax rate + amount, discounts, exemption reference — each with a checkbox. Caption: "Miss one field and the recipient can lose their Vorsteuerabzug."
Mandatory Invoice Fields Under Section 14(4) UStG: Complete Checklist
| No. | Mandatory Field | Legal Basis | Example |
|---|---|---|---|
| 1 | Full name and address of the supplier | §14(4) No. 1 UStG | Complyance GmbH, Musterstr. 1, 10115 Berlin |
| 2 | Full name and address of the recipient | §14(4) No. 1 UStG | Client Ltd, 10 Downing St, London |
| 3 | Supplier's tax number or VAT ID | §14(4) No. 2 UStG | DE123456789 |
| 4 | Invoice date | §14(4) No. 3 UStG | 21 April 2026 |
| 5 | Sequential invoice number | §14(4) No. 4 UStG | INV-2026-00471 |
| 6 | Quantity and nature of goods/services | §14(4) No. 5 UStG | 10x Software licence "Complyance Pro" |
| 7 | Date of supply or service | §14(4) No. 6 UStG | Service period: April 2026 |
| 8 | Net amount, broken down by tax rate | §14(4) No. 7 UStG | EUR 5,000.00 net |
| 9 | Applicable tax rate and tax amount | §14(4) No. 8 UStG | 19% VAT = EUR 950.00 |
| 10 | Any pre-agreed reductions | §14(4) No. 9 UStG | "2% discount if paid within 10 days" |
| 11 | Reference to tax exemption (if applicable) | §14(4) No. 8 UStG | "Exempt under §4 No. 1a UStG" |
Practical tip: If even one of these mandatory fields is missing, the recipient may lose their right to deduct input VAT (Vorsteuerabzug).
What Did the Growth Opportunities Act Change?
The Growth Opportunities Act was approved on 22 March 2024 and entered into force on 28 March 2024.
Before vs. After Comparison
| Aspect | Before | After |
|---|---|---|
| Invoice definition | Single, unified invoice concept | Two-tier system: "electronic invoice" vs. "other invoice" |
| Electronic invoice | Any electronic format (including PDF by email) | Only structured formats compliant with EN 16931 |
| PDF by email | Qualified as an electronic invoice | Now classified as an "other invoice" only |
| Recipient's consent | Required for electronic invoices | No longer required for B2B e-invoices |
| Paper invoice | Default option | "Other invoice"; only permitted during transitional periods |
| Mandatory fields (§14(4)) | No change | No change; only format requirements are new |
Important: A plain PDF sent by email is no longer an "electronic invoice" under the revised Section 14 UStG.
The New E-Invoice Definition in Section 14 UStG
The most consequential change lies in Section 14(1), sentence 3 UStG (new version):
An electronic invoice is an invoice that is issued, transmitted, and received in a structured electronic format that enables electronic processing.
This structured format must comply with European standard EN 16931. In practice:
- XRechnung, Germany's national reference format
- ZUGFeRD (version 2.0.1 and above), a hybrid format
- Peppol BIS Billing 3.0, a pan-European format
Timeline: When Do the Changes Take Effect?
| Date | What Happens |
|---|---|
| 28 March 2024 | Growth Opportunities Act enters into force |
| 1 January 2025 | Obligation to receive e-invoices for all B2B businesses |
| 1 Jan 2025 to 31 Dec 2026 | Transition phase: paper and PDF invoices may still be *sent* |
| 1 Jan 2027 to 31 Dec 2027 | Extended transition only for businesses with prior-year revenue up to EUR 800,000 |
| 1 January 2028 | Full e-invoicing obligation for all B2B transactions in Germany |
Paragraph-by-Paragraph Explanation
Section 14(1): Definition of "Invoice"
What it says: Distinguishes between an "electronic invoice" (structured format per EN 16931) and an "other invoice" (paper, PDF, etc.).
What it means: When German tax law refers to an "e-invoice," it now exclusively means a machine-readable, structured format.
Section 14(2): Obligation to Issue Invoices
What it says: Specifies when an entrepreneur must issue an invoice.
What it means: In B2B transactions, you must always issue an invoice within six months of the supply.
Section 14(3): Self-Billing (Gutschrift)
What it says: Allows the recipient to issue the invoice on behalf of the supplier.
What it means: Self-billing remains permissible. The e-invoicing obligation applies to self-billed invoices as well.
Section 14(4): Mandatory Invoice Fields
What it says: Lists every piece of information that must appear on an invoice.
What it means: The content requirements have not changed.
Practical Implications for Businesses
1. Ensure you can receive e-invoices (required since 1 January 2025)
Your company must be technically capable of receiving invoices in EN 16931-compliant formats.
2. Adapt your processing workflows
An e-invoice in XML format cannot be "read" the way a PDF can.
3. Switch your outbound invoices (by 1 January 2028)
From 2028 onward, every B2B invoice must be issued as an e-invoice.
4. Review your invoice templates
Ensure that all mandatory fields are correctly mapped.
5. Do not forget archiving
E-invoices must be archived in compliance with Germany's GoBD regulations. The retention period is 10 years.
Do's and Don'ts
| Do | Don't |
|---|---|
| Send e-invoices in XRechnung or ZUGFeRD format | Call a PDF sent by email an "e-invoice" |
| Verify all 11 mandatory fields on every invoice | Omit fields because "the client doesn't need them" |
| Set up a system to receive structured e-invoices | Assume your suppliers will keep sending paper |
| Archive e-invoices in their original format (XML) per GoBD | Store e-invoices only as printouts |
| Use the transition periods wisely, but start early | Wait until the last moment |
| Automate inbound invoice validation | Manually check every incoming e-invoice |
| Train your accounting and procurement teams | Assume that "the software handles everything" |
Conclusion
Section 14 UStG remains the definitive legal provision for invoicing in Germany. The Growth Opportunities Act has modernized this section for the digital age: the clear separation between "electronic invoice" and "other invoice" forms the legal foundation for Germany's phased e-invoicing mandate through 2028.
The good news is that the mandatory content requirements have not changed at all. If your invoices already contained the correct information, you "only" need to change the format.
Related posts
Frequently Asked Questions
Section 14 of the German VAT Act governs the issuance of invoices. It specifies who must issue invoices, what format they must take, and what mandatory information they must contain.
The mandatory fields include: name and address of both supplier and recipient, tax number or VAT ID, invoice date, sequential invoice number, description of goods/services, date of supply, net amount, tax rate and amount, references to exemptions or discounts.
No. Since the Growth Opportunities Act, a plain PDF no longer qualifies as an "electronic invoice." Only structured, machine-readable formats compliant with EN 16931 meet the legal definition.
Since 1 January 2025, all businesses in Germany must be able to receive e-invoices in B2B transactions.
Yes. Small businesses have been required to receive e-invoices since 1 January 2025. The standard transitional periods apply to sending.
Both formats comply with EN 16931. XRechnung is a pure XML format. ZUGFeRD (version 2.0.1 and above) is a hybrid format that embeds XML data inside a PDF.
No. The substantive content requirements under Section 14(4) UStG remain unchanged.
The full text is available on gesetze-im-internet.de (in German).
About the Author
Swathy
Content Marketer
I’m a Content Marketer at Complyance, focused on e-invoicing. Over the years, I’ve created a wide range of content, including blog posts, whitepapers, and product guides, which have supported Complyance’s growth across markets such as the UAE and EU regions. My goal is to deliver content that is comprehensive, clear, accurate, and easy to understand, no matter how complex the topic.
