The mandate comes from the Wachstumschancengesetz (Growth Opportunities Act), passed in 2024, which amended §14 of the German VAT Act (Umsatzsteuergesetz). The change did two things at once: it made structured electronic invoices the default requirement for domestic B2B transactions, and it removed the previous rule that an electronic invoice needed the recipient's consent — under the new regime, a compliant E-Rechnung can simply be sent.

Why the government wants this

Three reasons sit behind the change, and they reinforce each other:

  • Closing the VAT gap. Structured invoice data gives tax authorities machine-readable transaction records instead of documents that have to be requested and read individually, making VAT fraud — particularly missing trader fraud — harder to hide.
  • Aligning with EU plans. The mandate is Germany's domestic step toward the EU's broader VAT in the Digital Age (ViDA) initiative, which aims for real-time, structured digital reporting of transactions across the EU over the coming years.
  • Cutting processing costs. Structured data removes manual re-entry on both sides of a transaction, which is a genuine efficiency gain once the transition itself is behind you.

The rollout timeline

The mandate phases in over several years rather than arriving all at once, and the receiving obligation and the issuing obligation are on different clocks.

Germany's e-invoicing mandate rollout.
Date What changes
1 January 2025 Every business in Germany must be able to receive a structured E-Rechnung for domestic B2B transactions.
2025–2026 Transitional period: businesses may still issue invoices as paper or other electronic formats such as a plain PDF, generally with the recipient's agreement.
1 January 2027 Businesses with turnover above €800,000 in the prior year must issue e-invoices for domestic B2B transactions.
1 January 2028 The issuing obligation extends to essentially all businesses, regardless of turnover.

Confirm the exact current rules with a tax advisor before relying on transitional allowances, particularly around EDI-based invoicing arrangements, which have their own transitional treatment.

What's exempt

  • Business-to-consumer (B2C) invoices are not covered by the mandate at all — it applies to B2B transactions between businesses established in Germany.
  • Small-value invoices (Kleinbetragsrechnungen), generally up to €250, and travel tickets remain exempt from the structured format requirement even once the mandate is fully in force.
  • Cross-border invoices to or from businesses outside Germany are not governed by this domestic mandate; cross-border e-reporting is being addressed separately at EU level and on a longer timeline.

What happens if you don't comply

The practical risk isn't a fine for the invoice format itself — it's that a non-compliant invoice may not properly support the recipient's input VAT deduction, since it fails to meet the formal requirements for a valid invoice under the amended law. In practice this means correcting and reissuing the invoice correctly, which is friction neither side wants once the obligation applies to them.

Getting the format right matters more than getting it fast. Our guide to creating and sending an E-Rechnung covers choosing between XRechnung and ZUGFeRD and avoiding the mistakes that make an invoice non-compliant.

Frequently asked questions

What law made E-Rechnung mandatory in Germany?

The Wachstumschancengesetz, passed in 2024, amended §14 of the German VAT Act to require structured electronic invoices for domestic B2B transactions, phased in between 2025 and 2028.

Why did Germany introduce mandatory e-invoicing?

Mainly to reduce VAT fraud and close the VAT gap through structured, machine-readable transaction data, and to align with the EU's push toward digital VAT reporting.

By when do all businesses need to issue e-invoices?

From 1 January 2027 for businesses with turnover above €800,000 in the prior year. From 1 January 2028, the obligation extends to essentially all businesses.

Are any invoices exempt from the e-invoice format requirement?

Yes. Small-value invoices up to around €250 and travel tickets remain exempt even after the mandate is fully in force. B2C invoices aren't covered by the mandate at all.

What happens if I issue a non-compliant invoice after the deadline?

The main risk is that it may not properly support the recipient's input VAT deduction, since it fails to meet the formal requirements — it will likely need correcting and reissuing.