Germany: 2025 changes to invoice retention and small‑business e‑invoicing

1. Legal background and effective date

The changes result from two key pieces of legislation:​

• The Fourth Bureaucracy Reduction Act (Viertes Bürokratieentlastungsgesetz), published in the Federal Law Gazette on 29 October 2024.​
• The Annual Tax Act 2024 (Jahressteuergesetz 2024), approved on 22 November 2024.​

Together, these laws introduce several updates that take effect from 1 January 2025. The Fourth Bureaucracy Reduction Act can be viewed here: Federal Law Gazette publicationopen_in_new. Information on the Annual Tax Act is available in the Bundesrat documentation: Annual Tax Act 2024 – Bundesratopen_in_new.​

2. Shorter retention period for invoices

From 1 January 2025, the required archiving retention period for invoices will be reduced from ten to eight years. This change applies to all invoices whose retention period has not yet expired by 31 December 2024.​

Other business records, such as commercial books, inventories and annual financial statements, remain subject to a ten‑year retention period and are not affected by the reduction. The update aims to reduce administrative burdens while keeping key accounting records available for sufficient time.​

3. Updated thresholds and e‑invoicing rules for small businesses

For businesses operating under the small business scheme (Kleinunternehmerregelung), which are exempt from VAT, the eligibility thresholds are being increased:​

• The previous fiscal year turnover limit rises from 22,000 EUR to 25,000 EUR.​
• The current fiscal year expected turnover limit increases from 50,000 EUR to 100,000 EUR.​

These changes align German rules with EU Directive 2020/285 and modernise the definition of VAT‑exempt small businesses.​

In relation to the upcoming e‑invoicing mandate:​

• Small businesses below these thresholds will be exempt from the obligation to issue EN‑compliant electronic invoices.​
• They may continue to issue other types of invoices, such as PDF via email or paper invoices.​
• However, they must still be able to receive EN‑compliant e‑invoices, meaning customers can send structured electronic invoices even if the small business does not issue them.​

This approach reduces compliance pressure on very small taxpayers while ensuring they can still participate in the increasingly digital invoicing environment.