Regulatory updates - Germany

On October 15, 2026, the German Federal Ministry of Finance (BMF) issued a supplementary letter on mandatory domestic B2B e-invoicing. The document amends the VAT Implementation Decree (Umsatzsteuer-Anwendungserlass, UStAE) and offers additional clarifications on implementing the e-invoicing mandate. Key aspects of the letter include the following:

Advance and final invoices

Down payment, advance and interim invoices issued before a supplier becomes subject to mandatory e-invoicing do not have to be converted into e-invoices, even if the supply or payment happens later.  For final invoices, the relief has been extended until June 30, 2030. Payments already received can be deducted as a lump sum in field BT-113 (Paid amount), with details in BT-22 (Invoice note). Alternatively, the deduction can be made in an embedded, referenced attachment.

Business rule errors

Business rule error does not automatically make an e-invoice invalid for VAT purposes. If there is no format error, the file remains a valid e-invoice for VAT purposes, even if a business rule error is present. In contrast to a format error, a business rule error is only relevant for VAT purposes if it concerns mandatory VAT information on the invoice. The differing technical perspective is irrelevant for VAT purposes, meaning that input tax deduction is possible even in the case of business rule errors that are not relevant for VAT purposes.

Discounts and gross prices

The EN 16931 core model is net based, which may cause rounding differences. There is currently no gross invoice format for XRechnung or ZUGFeRD. For gross price invoices issued until December 31, 2027, the structured part may show only totals by tax rate and tax exemption. A human readable embedded attachment must then contain the full itemized description.

In addition, price reductions agreed in advance must be stated unless they are already reflected in the price. Where the amount is not yet known, a general reference to the written agreement is accepted.

Invoice corrections

Correction of an e-invoice must also be issued as an e-invoice. BMF currently does not indicate a single correction method therefore corrected, reissued invoices and commercial credit notes may be used as long as the corrected invoice details are clear.

Mandatory VAT information

All mandatory VAT information must be contained in the structured part of the e-invoice. The BMF letter also applies this to the description of services. The details such as type, scope and content of the service, and the place of supply where relevant, must be stated clearly enough in the structured part of the e-invoice to be able to determine the tax treatment and the recipient's entitlement to input VAT deduction. Supplementary details, such as timesheet breakdowns, can go in an embedded attachment.

Construction invoices

The structured part of the invoice may only include the individual trades with their totals. The detailed bill of quantities must then go in a human readable embedded attachment that is clearly referenced. It can also be sent as a structured file (i.e. GAEB), or in another way agreed between the parties.

The semantic data model now has more than 50 new business terms. Key changes include:

• BT-10 "Buyer reference" can be given more than once
• XML attachments are allowed in the core invoice
• The new BG-35 "Early payment discount" replaces the existing discount scheme
• The new BG-34 "Charges on behalf of a third Party" covers third-party claims
• More detailed delivery information can be included
• One invoice can reference multiple orders and deliveries

The full XRechnung 4.0 bundle is expected in spring 2027.

For more detailed information on the technical changes, please refer to the official release.

The timeline was announced by state secretary Michael Schrodi at an event organised by the German electronic invoice association (VeR). He confirmed that the legislative process will begin in 2027, followed by a voluntary pilot from early 2029. The reporting system is then targeted to go live and become mandatory from July 1, 2030.

While the key dates have now been set, technical details are still awaited. Businesses nonetheless should use this time to begin the preparation.

As a reminder, this reporting system builds on top of Germany's ongoing B2B e-invoicing mandate, which is being rolled out in stages. Since January 1, 2025, businesses have already been required to receive structured electronic invoices compliant with the EN 16931 standard. The obligation will soon extend to the issuing side:

• January 1, 2027: mandatory issuance for taxpayers with prior-year turnover above EUR 800,000
• January 1, 2028: mandatory issuance for all remaining taxpayers