E-Invoicing: What You Really Need to Know as a Business Owner

Since 1 January 2025, e-invoicing has been mandatory for domestic B2B transactions. What this concretely means for your company is, however, less dramatic than many headlines suggest. The obligation is introduced in stages, there are generous transition periods, and most common software solutions already support the new formats.

Still, it is worth understanding the rules clearly, because there is a new definition of the term that surprises many business owners: A PDF invoice is not an e-invoice.

What counts as an e-invoice?

An e-invoice is an invoice in a structured electronic format that can be processed automatically. The format must comply with the European standard EN 16931. PDFs, scans and faxes do not meet this requirement. They are now considered "other invoices".

Two formats are already established and compliant: XRechnung (pure XML, optimally machine-readable, but not readable without a viewing tool) and ZUGFeRD from version 2.0.1 (XML data embedded in a readable PDF). For most medium-sized companies, ZUGFeRD is the more pragmatic choice, because the invoice still looks like a normal PDF, but is also machine-readable.

The timetable: Three phases

You must already be able to receive them now. Since 1 January 2025, every company must be able to accept and archive e-invoices. No transition period, no revenue threshold.

For issuing, staggered deadlines apply:

Until the end of 2026, all companies may continue to send paper invoices or PDFs. PDFs require the recipient's consent (including implied consent, e.g. through terms and conditions).

2027 companies with prior-year revenue of more than 800,000 euros must issue e-invoices. Smaller companies may continue to work with paper or PDF for one more year.

From 2028, all companies in the B2B sector must issue e-invoices. No more exceptions, except for those mentioned below.

What remains exempt

No e-invoicing obligation exists for: small-value invoices under 250 euros, tax-exempt services under Section 4 Nos. 8 to 29 of the VAT Act (UStG), invoices to end consumers (B2C) and tickets. Small businesses under Section 19 UStG do not have to issue e-invoices, but they must be able to receive them.

Relevant in practice: recurring invoices created before 1 January 2027 as paper or PDF invoices do not have to be reissued later as e-invoices, as long as the invoice details do not change.

Archiving: What changes

E-invoices must be retained for ten years, just like paper invoices. The decisive invoice content is the XML file, not the attached PDF. Archiving must be audit-proof: unalterable, readable at any time and available for the entire retention period. Anyone already using a DMS or GoBD-compliant archiving solution is generally well positioned here.

Why all this?

The e-invoicing obligation is not an end in itself. It prepares the way for a planned reporting system through which invoice data is intended to be transmitted directly to the tax authorities in the future. At EU level, this is being advanced as part of the ViDA initiative (VAT in the Digital Age); the current timetable envisages implementation from July 2030. Anyone who gets set up properly now will have less need for retrofitting when the reporting system arrives.

What you should do now concretely

Ensure receipt. Check whether your software can process XRechnung and ZUGFeRD. Most common solutions (Easybill, lexoffice, sevDesk, DATEV Unternehmen Online) already do.

Prepare sending. Even though the transition period is still running: if your software can generate e-invoices, there is nothing against switching now. The sooner the process is established, the smoother the transition will be.

Talk to your tax advisor. E-invoicing is not just an IT issue. Which format, which transmission method and which archiving solution suit your company depends on your industry, your invoice volume and your existing systems. A good tax advisor actively supports this transition instead of finding out at the end of the year that the formats do not match.