The 2025 e-invoicing obligation is here - what companies and online retailers need to know now

The time has come - after several changes and adjustments, the Federal Council passed the Growth Opportunities Act on March 22, 2024 was finally passed. This obliges all companies based in Germany to accept e-invoices from January 1, 2025. But what exactly does this mean for entrepreneurs? And what do they need to pay particular attention to now? We have summarized the most important points.

The background

The Federal Council expects the law to reduce taxes and bureaucracy for German companies by a total of 3.2 billion euros. In addition, there is to be a so-called research allowance for small and medium-sized enterprises to further stimulate the economy. At the same time, however, the Growth Opportunities Act also lays important foundations for a successful transition to the digital age. planned sales tax reform of the European Commission, which is due to take place in 2028: The EU-wide legislative initiative "VAT in the Digital Age" (ViDA) - or "Value Added Tax in the Digital Age" requires standardized e-invoices based on the EU standard CEN 16931.

What exactly does the e-invoicing obligation mean for companies?

The law obliges German companies to accept e-invoices from January 1, 2025. At the same time, however, it also provides for various Transition periods and simplifications for the issuing of e-invoices. Accordingly, companies may still issue paper invoices or invoices in another electronic format for sales carried out in the period from January 1, 2025 to December 31, 2026, provided the recipient agrees. For companies whose total turnover in the previous year did not exceed EUR 800,000, this will even apply until December 31, 2027. Special regulations are also still in place for tax-free services, small-value invoices of up to 250 euros and tickets, for example.

By contrast, paper invoices between German companies and businesses will no longer be used at all from 2026. It is interesting to note, however, that invoices between companies and consumers are not affected by this. These can still be sent on paper or in the usual PDF format.

Mandatory invoicing in online retail? What applies to online retailers?

Did you think that e-billing was a matter of course in online retail? A look at the law book shows: That's not quite true! According to Section 14 (2) of the German Value Added Tax Act (UStG), there is no general obligation toto issue an invoice to consumers in online commerce. So while companies in the B2B sector are obliged to issue invoices, this does not apply to online retailers vis-à-vis consumers. This is because in the B2C sector - i.e. between online retailers and consumers - invoicing is a voluntary service.

The e-invoicing obligation therefore only applies to you as an online retailer if you do business with other companies in the B2B sector: As an online retailer, you are then obliged to be able to receive, send and archive invoices in the prescribed formats (XRechnung or ZUFeRD) in future.

Even though e-invoicing is not mandatory in B2C, online retailers should not underestimate the advantages it offers: E-invoicing optimizes processes for returns and complaints, which saves time and money. At the same time, professional invoicing signals seriousness to customers and thus strengthens the bond with them. Last but not least, retailers also benefit from clear accounting and, as a result, better documentation and simpler tax returns.

Conclusion

The e-invoicing obligation came into force on January 1, 2025. However, the obligation only affects companies in the B2B sector. Whether or not you use e-invoicing as a B2C online retailer is therefore up to you for the time being. Nevertheless, the use of e-invoicing offers tangible advantages for you and your online store, as you benefit from clearer documentation and strengthen customer loyalty by conveying seriousness through the sending of e-invoices.