EU backs Germany’s 2025 B2B e‑invoicing obligation

1. EU Council decision proposal and timing

The EU Council has published a Decision Proposal authorising Germany to require electronic invoicing between taxable persons established in Germany. The text foresees that Germany’s B2B e‑invoicing obligation could begin from 1 January 2025, once the derogation takes effect.​

The proposal would grant Germany a derogation from the VAT Directive for a limited period, allowing it to deviate from the standard EU invoicing rules in order to mandate e‑invoicing in the business sector. The official proposal is available here: EU Council Decision Proposal COM(2023) 340open_in_new.​

2. Scope, duration and alignment with ViDA

Under the proposal, the derogation would apply from January 2025 until December 2027, or until the EU’s “VAT in the Digital Age” (ViDA) reform becomes applicable, whichever comes first. During this period, taxable persons established in Germany would be required to issue e‑invoices and report relevant data to the tax authorities, while e‑invoicing has already been mandatory in the public sector since November 2020.​

Germany intends to roll out the system gradually:​

• First by mandating that businesses issue e‑invoices in a compliant structured format.
• Later by requiring that invoice data be submitted to the government via a national electronic reporting system.

The Federal Government’s aim is to ensure that this national reporting system is aligned with the ViDA reform, using compatible structures to avoid duplicated reporting obligations. For an official overview of ViDA, see the European Commission page: VAT in the Digital Age – European Commissionopen_in_new.​

3. Who is in scope and how the model will work

The planned obligation will apply to businesses established in Germany, which will be required to issue e‑invoices for in‑scope domestic B2B transactions. When designing the national rules, lawmakers intend to take into account the situation of small businesses, for example by introducing size‑ or amount‑based thresholds under which e‑invoice use may remain optional for a transitional period.​

From a technical perspective, the model Germany is envisaging is largely consistent with the ViDA proposals:​

• Invoice issuers will not need to submit each invoice to the tax authority for prior validation before sending it to the buyer.
• Trading parties will continue to manage invoice exchange and distribution between themselves.
• Taxable persons will be required to report a subset of invoice data to the tax administration in a structured electronic format.
• Germany will accept formats that comply with the European e‑invoicing standard EN 16931; see the compliance information here: EN 16931 complianceopen_in_new.​

Once reported data is collected, tax authorities will be able to cross‑check it against VAT returns, strengthening the fight against VAT fraud while supporting digitalisation and automation for compliant businesses.