E-Invoicing in Germany: What Applies from 2025 to 2028

Germany's e-invoicing mandate for invoices between domestic businesses arrives in stages. The first stage already applies: since 1 January 2025 any supplier may send you an e-invoice without asking first, and you must be able to accept it. The obligation to issue e-invoices yourself follows in 2027 and 2028. For accounts payable it means that for years structured XML invoices, hybrid PDF files, plain PDF invoices and scanned paper will arrive side by side. This article summarises what applies and how this mixed intake can be processed automatically.

What is an e-invoice, and what is not?

Since 2025, section 14 (1) of the German VAT Act (UStG) defines an e-invoice as an invoice that is issued, transmitted and received in a structured electronic format and can be processed electronically. The format must conform to the European standard EN 16931 or be interoperable with it. Paper, a scan or a plain PDF file has been an "other invoice" (sonstige Rechnung) since 2025. A PDF sent by e-mail is therefore not an e-invoice, even though it is digital.

Two formats are common in Germany:

• XRechnung: a pure XML format developed by the Coordination Office for IT Standards (KoSIT) for invoices to public authorities. Without a viewer it is not readable by people.
• ZUGFeRD: a hybrid format, a PDF/A-3 file with embedded XML. A person sees the PDF page, the system reads the XML. ZUGFeRD counts as an e-invoice from version 2.0.1 in the profiles that conform to EN 16931; the MINIMUM and BASIC WL profiles do not count as e-invoices.
• Other formats, such as EDI procedures, are permitted if the mandatory details can be extracted correctly and completely into a format that conforms to EN 16931.

In a hybrid format such as ZUGFeRD the XML part is the authoritative part. If the PDF image and the XML differ, the data in the XML apply (Federal Ministry of Finance letter of 15 October 2024).

Who must receive since when, and who must issue from when?

The legal basis is the Growth Opportunities Act (Wachstumschancengesetz) of March 2024, which amended section 14 UStG and set transition periods in section 27 (38) UStG. The mandate applies to supplies between businesses that are both established in Germany. Invoices to consumers and invoices from or to businesses abroad are not covered.

Exempt from the issuing obligation are small-amount invoices up to 250 EUR (section 33 UStDV), tickets (section 34 UStDV) and invoices for certain tax-exempt supplies under section 4 nos. 8 to 29 UStG. Small businesses under section 19 UStG do not have to issue e-invoices under the Annual Tax Act 2024 (Jahressteuergesetz 2024), but they must be able to receive them. Check this exception against section 34a UStDV or with your tax adviser before relying on it.

According to the Federal Ministry of Finance letter of 15 October 2024, an e-mail inbox is sufficient for receiving. A portal or an interface is possible but not required. The letter is the central administrative guidance on e-invoicing. Check before you change your intake whether the tax administration has published a follow-up letter since.

What changes for incoming invoices?

Less than the deadlines suggest, and also more. Until the end of 2027 most suppliers may still send PDF or paper. Small-amount invoices, invoices from foreign suppliers and invoices from small businesses stay outside the mandate even after that. The invoice intake therefore stays mixed for years: XML files, hybrid PDF files, plain PDF invoices and scanned paper, often in the same inbox.

At the same time a new step appears. An XRechnung has to be made visible before a person can check it. A ZUGFeRD file has to be processed from the XML, not from the image. And structured data are not automatically correct: a wrong amount or a changed bank account is in the XML just as on paper. Vendor master, duplicates, bank details and posting rules still have to be checked.

How does automatic processing work?

An invoice intake that solves the mandate and the manual work at once processes every format in one flow:

1. Intake: all invoices land in one inbox or folder. The system detects the format: XML, PDF with embedded XML, PDF with a text layer, or an image.
2. Read structured data: where XML exists, supplier, invoice number, date, amounts, tax rates and bank details are taken directly from the fields, and the XML is validated against the schema.
3. Extract from PDF and scans: where there is no XML, a model reads the same fields from the page, each with its page number and quote.
4. Match: each supplier is found in the vendor master by tax number, registration number or name. Invoices already posted are caught, amounts are reconciled within tolerances, changed bank details are flagged. Where purchase orders exist, the invoice is checked against them.
5. Evidence per value: every value shows its source, either the page with the quote or the XML field. A value without a source counts as unconfirmed.
6. Exceptions to a person: only invoices with a discrepancy go to review. The rest go to export after approval. Every action is logged.

For the reviewer every invoice looks the same, whatever its format: on one side the invoice page or the rendered XML view, on the other the fields with their source.

What should you look for in a tool?

• Traceability: every value names its page and quote or its XML field. Without that, your team checks every value twice.
• All formats in one intake: XML, hybrid PDF, plain PDF and scans, without two separate flows.
• Runs on your servers or with an operator of your choice, under a data processing agreement according to Art. 28 GDPR.
• Choice of model: a cloud model under contract or an open model on your own hardware, changeable without rebuilding.
• Audit log: who confirmed, corrected or approved which value and when.
• Retention: the original, for e-invoices the XML part, is stored unchanged.
• Metrics: correction rate, evidence rate and straight-through rate from real use, not from a demonstration.

How long must e-invoices be retained?

Invoices must be retained under section 14b UStG. The Fourth Bureaucracy Relief Act (Viertes Bürokratieentlastungsgesetz) shortened the period from ten to eight years as of 1 January 2025; check the current version of the law and the transition rules for older documents. For an e-invoice the structured part must be retained unchanged in its original form and machine-readable; the German rules on digital bookkeeping (GoBD) apply. A printout or a PDF view does not replace the XML.

What Sovern Tally does today

Today Sovern Tally processes invoices as PDF, PNG, JPEG and TIFF: every field is extracted with its page and quote, supplier, posted invoices and bank details are checked against CSV exports from your ERP, and exceptions go to a review view with roles and an audit log. Scanned invoices read with OCR and e-invoices as XML are listed on the product page under next steps, not under existing features. A pilot runs on your own invoices, with success criteria agreed up front; the first conversation is free.

Last reviewed: 3 November 2026. This article is not tax advice. Check deadlines and exceptions against the text of the law and with your tax adviser.