E-Invoicing in Germany for Small Businesses: 2027 and 2028
Short answer: Since 1 January 2025 every business in Germany must be able to receive e-invoices from other businesses, including small businesses under the Kleinunternehmer scheme. Issuing them becomes mandatory in 2027 for companies with more than 800,000 euros prior-year turnover and in 2028 for everyone else. Kleinunternehmer, invoices up to 250 euros and consumer invoices are exempt.
A freelance developer in Berlin sends her monthly invoice as a PDF from a spreadsheet template. For now that is fine. In 2027 or 2028, depending on her turnover, it won’t be, and the client’s accounts department will probably notice before the tax office does.
If you moved here from a country where invoicing is a PDF and a bank account number, the German approach can feel heavy. It is part of an EU-wide push toward machine-readable invoices, and Germany is phasing it in for domestic B2B business first. Germany’s rules are in the VAT Act, with transition periods set out in section 27(38) UStG. They look confusing until you separate three questions. Must I receive e-invoices? Must I send them? And from when?
What counts as an e-invoice
An e-invoice is a structured electronic data set that software can read automatically, compliant with the European standard EN 16931. The two common German formats are XRechnung, a pure XML file, and ZUGFeRD, a PDF with an embedded XML file.
A PDF that merely looks like an invoice is not an e-invoice. Neither is a scan. Legally these are “other invoices” (sonstige Rechnungen), and those are being phased out between businesses.
| Criterion | E-invoice | Other invoice |
|---|---|---|
| XRechnung (XML) | ||
| ZUGFeRD 2.0.1 or later, EN 16931 profile | ||
| PDF exported from Word or Excel | ||
| Paper invoice | ||
| Photo or scan of an invoice |
Receiving: mandatory for everyone since 2025
Since 1 January 2025 every business must be able to accept e-invoices from other businesses in Germany. That explicitly includes Kleinunternehmer, the VAT-exempt small business scheme many freelancers use.
Technically an email inbox is enough. The catch is reading the files. An XRechnung is raw XML that looks like code without a viewer. You need software that displays it, and you must keep the original file. A printout doesn’t replace it.
Under section 147(3) of the German Fiscal Code, accounting vouchers such as incoming invoices must be kept for eight years since 2025. For e-invoices that means the XML file, unchanged and readable, for eight years.
Sending: who has to, and when
The transition rules apply to invoices between businesses in Germany:
- 1 Jan 2025All businesses must be able to receive e-invoices.
- To 31 Dec 2026Paper or PDF still allowed for sending, PDF with the recipient's consent.
- 2027Paper or PDF (with consent) only if prior-year turnover was 800,000 euros or less. EDI with consent still allowed.
- From 1 Jan 2028E-invoices mandatory for all B2B senders, apart from the exemptions below.
Source: Section 27(38) German VAT Act (UStG)
For a small Berlin business under 800,000 euros, 2027 is a buffer year. If your 2026 turnover tops 800,000 euros, you must send e-invoices from 1 January 2027, which is only weeks away.
- Turnover 2026
- €420,000
- Threshold for the 2027 transition rule
- €800,000
- Invoices in 2027
- PDF or paper still allowed
- Invoices from 1 January 2028
- e-invoice only
- Latest switch-over
- 31 December 2027
Total turnover as defined in section 19(2) UStG, simplified.
Exemptions
Some invoices never need to be e-invoices:
- Kleinunternehmer: under section 34a of the VAT Implementing Ordinance (UStDV), invoices for supplies exempt under section 19 UStG may always be sent as other invoices.
- Small-amount invoices up to 250 euros gross under section 33 UStDV, such as a DIY store receipt.
- Tickets for passenger transport under section 34 UStDV.
- Invoices to consumers, because the mandate only covers supplies between businesses in Germany.
Since 2025 the Kleinunternehmer threshold is 25,000 euros turnover in the previous year and 100,000 euros in the current year. Cross it and the exemption ends. Until then you only need to be able to receive.
Why your clients will care first
Once you are obliged to issue e-invoices, a PDF to a German business client is no longer a proper invoice. The person most exposed is your client, whose input VAT deduction can be at risk without a proper invoice. Larger clients’ accounts payable teams will start asking in 2027, and by 2028 at the latest.
For agencies, IT freelancers and trades that mostly bill other companies, that is the real pressure. The tax office is not the first to knock. Your client’s bookkeeping is.
Trouble spots on the receiving side
ZUGFeRD files look like ordinary PDFs. If you only archive the visual part and ignore the embedded XML, you have technically kept the wrong document. Where the two differ, the structured data prevails.
XRechnungs arrive as bare XML attachments. The first one is easily mistaken for spam or a broken file. Decide who handles incoming invoices in your business and give that person a viewer.
Credit notes, cancellations and progress invoices deserve a test run with your tax adviser before the first real one. Trades with several progress invoices and a final invoice that offsets them all should check that their software exports the references correctly.
Software you will need
For most small businesses the switch is a subscription, not an IT project. Common invoicing and bookkeeping tools create XRechnung and ZUGFeRD from the same form you already use.
Two examples with list prices from the vendors’ websites in October 2026: Lexware Office lists e-invoices from its M plan, regularly 12.90 euros a month net. sevdesk allows three invoices or e-invoices a month on its free plan, and its “Rechnung” plan regularly costs 11.90 euros on monthly billing. Both were running time-limited discounts when checked, so prices may differ. If your team works in English, check the interface language during the free trial.
- Set one email address for incoming invoices and tell suppliers
- Install a tool to view and check XRechnung and ZUGFeRD files
- Decide where XML originals are archived for eight years
- Switch your invoicing tool and send a test invoice to your tax adviser
- Check large clients' master data: purchase order numbers, routing IDs for authorities
- Check your 2026 turnover: over €800,000? Then switch by 1 January 2027
Your tax adviser’s role
If you already pass receipts to your Steuerberater digitally, through DATEV Unternehmen online or an export from your bookkeeping tool, you have done the hardest part. Ask which format they want incoming e-invoices in and whether they can process the XML directly. Our guide to bookkeeping software in Germany covers that workflow.
If you invoice federal authorities, you know the drill already: e-invoices with a routing ID (Leitweg-ID) have been required there since 27 November 2020. For everyone else, the switch is a chance to connect invoicing with your till or shop. The till side is covered in our guide to POS systems and the TSE.
If invoice data comes from your own system, such as a custom order tool, that system must produce XRechnung or ZUGFeRD. Usually that is a contained extension. A team doing custom software development can size it quickly.
Your next step: look at your 2026 turnover. Above 800,000 euros, switch your invoicing tool this year. Below it, use 2027 to test, and make sure you can read incoming XRechnungs before then. Free orientation is available from the services listed under free business advice in Berlin.
Questions people ask
Is a PDF invoice an e-invoice in Germany?
No. An e-invoice is structured data that follows the European standard EN 16931, such as XRechnung or ZUGFeRD. A plain PDF counts as an 'other invoice', which is only allowed between businesses during the transition period.
I invoice clients abroad. Does the German mandate apply?
The mandate covers supplies between businesses established in Germany. Invoices to foreign business clients and to consumers are not covered, though your client's country may have its own rules.
Do I need special software to receive e-invoices?
An email inbox is enough to receive them. You do need a tool that displays XML invoices in readable form and a way to archive the original file for eight years.
What if I issue a PDF after the deadline?
Once you are required to issue e-invoices, a PDF to a German business client is no longer a proper invoice. That mainly puts your client's input VAT deduction at risk, so expect their accounts team to push back.
