Germany requests permission from European Commission to introduce mandatory B2B e-invoicing

Germany has formally asked the European Commission for a derogation to introduce mandatory e-invoicing for business to business supplies (B2B). The request was confirmed by Hans-Joachim Narzynski, Head of Division, German Ministry of Finance, at the IDst’s “Digital Transformation in VAT” conference. The event was scheduled to coincide with the anticipated release date of the VAT in the Digital Age (ViDA) draft directive.   

It was confirmed that the request is in-line with the proposed requirements per the draft ViDA Directive and therefore the e-invoice mandate would be based on the European e-invoicing standard (EN-16931), and the digital reporting would involve a subset of this data.  

There is currently no confirmation on when an e-invoicing mandate will be introduced as there is currently no agreement within the German Government to introduce mandatory e-invoicing yet, just agreement on having the ability to do so at a future date. When Olaf Scholz’s coalition government presented its Governing Agreement document, it included a paragraph on introducing as soon as possible “… an electronic reporting system nationwide, which will be used for the creation, verification and forwarding of invoices. In this way, we will significantly reduce the susceptibility to fraud of our VAT system and modernise and at the same time reduce the bureaucracy of the interface between the administration and the businesses."  It appears that this system is now a step closer to being implemented and that it will be aligned with new pan-European digital reporting requirements.  

In terms of invoice format, it is possible Germany may leverage its national ZUGFeRD 2.2 format which meets the German Core Invoice User Specification (CIUS) "XRechnung”, as well as being identical to France’s Factur-X format. The other interesting feature of the Factur-X / ZUGFeRD is that it is a hybrid document that combines both a human readable PDF with machine readable XML language.  

 Avalara has an e-invoicing solution that can help companies stay compliant in over 60 countries including the Peppol network. Avalara is a Certified Peppol Service Provider across Europe, Australia and New Zealand. Contact an expert at Avalara to discuss how we can assist with e-invoicing in a scalable and strategic way.