Germany issues second BMF draft on e‑invoicing compliance

1. Purpose and status of the second draft letter

On 25 June 2025, the Federal Ministry of Finance (BMF) published a second draft letter amending the VAT Implementation Decree (Umsatzsteuer‑Anwendungserlass, UStAE) and providing additional guidance on Germany’s mandatory e‑invoicing regime. The draft follows consultations with federal and state tax authorities and has been shared with industry associations due to its economic significance; comments can be submitted via these associations.​

The draft text is available here (German): BMF second draft letter on obligatory e‑invoicingopen_in_new.​

2. Compliance and validation rules

The draft letter sharpens the distinction between compliant e‑invoices and “other invoices”:​

• Formatting errors make an e‑invoice non‑compliant, so it is treated as an “other invoice” rather than a valid electronic invoice.​
• Content errors invalidate an e‑invoice; all mandatory data must be present in the structured part of the e‑invoice, and simply referring to attachments is not sufficient.​
• Invoice corrections must use the same format as the original invoice: for example, a credit note correcting an e‑invoice must itself be issued as an e‑invoice.​
• The BMF recommends using validation tools to check compliance with the European standard EN 16931.​

These points underline that both structure and content must fully meet legal requirements for an invoice to qualify as a valid e‑invoice for VAT purposes.​

3. Exemptions, consent and archiving

The draft also clarifies when e‑invoicing is mandatory and how consent works:​

• E‑invoicing is not mandatory for:
  • low‑value invoices (below 250 EUR),
  • travel tickets, and
  • invoices issued by small businesses;
    however, e‑invoices may still be issued without the recipient’s consent in these cases.​
• For B2C transactions (supplies to private consumers), e‑invoicing requires prior consent from the recipient.​

On archiving, the draft confirms that the structured part of an e‑invoice must be stored in its original form for eight years. Businesses must ensure authenticity, integrity and legibility through internal control systems or technologies such as electronic signatures or EDI processes.​

4. Amendments to the UStAE and special provisions

The second draft introduces several targeted updates to the VAT Implementation Decree:​

• Terminology and definitions are updated to clarify the distinction between e‑invoices and “other invoices”, structured formats and relevant EU standards.​
• Multiple paragraphs are amended to reflect mandatory e‑invoicing, including rules for real estate services, credit notes and invoice corrections.​
• For hybrid invoices, the PDF/image part and the XML structured data must contain identical information, avoiding discrepancies between what is displayed and what is processed.​
• Input tax deduction is allowed only on compliant invoices; for transactions subject to mandatory e‑invoicing, this means an e‑invoice that fully satisfies Articles 14 and 14a of the German VAT Act (UStG).​

The draft also provides special provisions, including:​

• guidance for invoices in insolvency or joint ownership scenarios, and
• rules for correction and replacement of invoices, including those issued by notaries and financial institutions.​

The changes outlined in this second draft are intended to apply to all transactions carried out on or after 1 January 2025, and the final version of the BMF letter is expected in Q4 2025