Mandatory e-invoicing in Germany starting in 2027

E-invoicing is no longer a topic of the future in Germany. As of January 1, 2025, new legal requirements apply to the exchange of invoices between domestic companies, particularly in transactions with government agencies. However, the transition to electronic invoicing is taking place in stages: While companies must already be able to receive e-invoices today, different transition periods apply to the mandatory issuance of e-invoices. When a company is required to issue e-invoices depends, among other things, on its revenue.

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A PDF invoice is not automatically an e-invoice

One of the most important changes already concerns the definition of an e-invoice. As of January 1, 2025, an invoice is considered an e-invoice only if it is issued, transmitted, and received in a structured electronic format, thereby enabling electronic processing.

A standard PDF invoice—such as one sent via email—no longer meets these requirements on its own and is instead classified as an “other invoice.”

Formats commonly used in Germany that can meet these requirements include, in particular, XRechnung and ZUGFeRD version 2.0.1 or higher. The basis for this is, in particular, the European standard EN 16931.
Thus, an e-invoice goes far beyond the digital transmission of an invoice document. The structured invoice data provides the foundation for automated invoice processing.

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The key revenue threshold: 800,000 euros

Through December 31, 2026, invoice issuers may generally still make use of the transitional provisions and, for example, continue to use paper invoices or, with the recipient’s consent, simple PDF invoices.

Starting January 1, 2027, the invoice issuer’s revenue will be the determining factor.

Companies with prior-year revenue exceeding 800,000 euros will no longer be able to use the revenue-based transitional provision. For them, e-invoicing will generally become mandatory for the relevant domestic B2B transactions starting in 2027.
Companies with prior-year revenue of less than 800,000 euros, on the other hand, will be granted an additional year of transition. This transitional provision will also end on January 1, 2028.

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What are the specific rules and exceptions?

The e-invoicing requirement applies in particular to invoices between domestic companies. However, not every business transaction is subject to this requirement.

Exceptions include, among others, B2C sales to private end consumers, certain tax-exempt sales, and small-amount invoices up to 250 euros. Services provided by small business owners are also exempt from the requirement to issue e-invoices. However, small business owners must still be able to receive e-invoices.

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E-invoices directly from Microsoft Dynamics 365 Business Central

Legal requirements present companies with a practical question: How can e-invoices be generated, verified, and reliably sent to customers without setting up separate processes outside the ERP system?

This is exactly where Document Dispatch for Microsoft Dynamics 365 Business Central comes in.
Document Dispatch automates document dispatch directly from Business Central and can be extended with the eDocuments feature to include functionality for electronic documents and e-invoices. This allows e-invoices to be integrated into existing dispatch processes, rather than setting up a separate process alongside Business Central.

Document Dispatch supports various electronic invoice formats and delivery requirements. This enables companies to prepare their invoice delivery processes for the growing demands of electronic invoice exchange.

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From XRechnung to Peppol: Responding flexibly to different requirements

A key challenge of e-invoicing is that customers, public sector clients, and international business partners may require different formats, alternative transmission methods, or additional information in e-invoices.

Document Dispatch therefore supports flexible configuration of electronic invoices.

In addition, the new B2Brouter integration provides a connection to electronic invoicing networks. When combined with Document Dispatch, electronic invoices can be transmitted via B2Brouter through channels such as the Peppol Delivery Network. B2Brouter handles functions such as validation, conversion, and delivery.

Status information can also be sent back to Document Dispatch. This makes it possible to track how a transmitted e-invoice was processed and via which network it is being delivered.

The result is an end-to-end process: Invoice data is generated in Business Central, processed according to the recipient's requirements, and then transmitted via the appropriate channel or network.

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See e-invoicing as a chance

While legal deadlines increase the pressure to act, the transition also offers companies the opportunity to fundamentally modernize their existing invoicing processes.

Structured invoice data enables significantly greater automation than traditional PDF documents. For companies using Microsoft Dynamics 365 Business Central, this presents an opportunity to directly combine the regulatory transition with greater automation of document distribution.

With Document Dispatch, Simova provides a solution that integrates e-invoices directly into existing Business Central processes and supports various formats and delivery methods. Through the B2Brouter integration, this approach can be further expanded to include validation, status tracking, and transmission via networks such as Peppol.

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An Overview of the Most Important Deadlines for E-Billing

• January 2025 – Reception of e-invoices
  
  • Domestic companies must, as a general rule, be able to receive e-invoices. As of this date, a simple PDF is no longer considered an e-invoice under the new definition.
• Through December 31, 2026 – Transition period for all companies
  
  • In general, companies may continue to issue other types of invoices for the affected sales. Paper invoices are permitted during this transition period; other electronic formats, such as a simple PDF invoice, generally require the recipient’s consent.
• Effective January 1, 2027 – Companies with prior-year revenue exceeding 800,000 euros
  
  • For issuers of invoices whose relevant prior-year revenue exceeds 800,000 euros, the revenue-based transition period ends. For domestic B2B transactions covered by the regulation, invoices must generally be issued as e-invoices.
• Through December 31, 2027 – Extended transition period for companies with prior-year revenue of up to 800,000 euros
  
  • If the invoice issuer’s relevant prior-year revenue is 800,000 euros or less, other types of invoices may continue to be used for transactions carried out in 2027. Certain EDI procedures will also benefit from a transitional provision through the end of 2027.
• Effective January 1, 2028 – End of the general transitional provisions
  
  • As of this date, companies with prior-year revenue of 800,000 euros or less must also issue e-invoices for domestic B2B transactions covered by the statutory regulations. The statutory exceptions—for example, for certain small-amount invoices or services provided by small businesses—remain unaffected.

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With Document Dispatch and the eDocuments feature, companies can map these e-invoicing processes directly within Microsoft Dynamics 365 Business Central and gradually prepare their invoicing processes for upcoming requirements.
In this way, a legal requirement also becomes an opportunity to make the entire invoicing process more digital, automated, and future-proof.

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