Germany e-Invoicing: What Must Retailers and Businesses Prepare for Before 2027 and 2028?

Germany is introducing mandatory B2B electronic invoicing in stages. Since January 2025, businesses have been required to receive structured e-Invoices. From January 2027, larger businesses must generally issue them, while the remaining businesses follow in 2028, subject to exemptions.

Germany's mandatory Business-to-Business (B2B) electronic invoicing rules are approaching their next implementation phase. From January 1, 2027, businesses exceeding the applicable EUR 800,000 turnover threshold will generally have to issue structured electronic invoices for domestic B2B transactions. The obligation becomes more widely applicable from January 1, 2028.

These deadlines are not newly introduced requirements. They form part of Germany's existing electronic invoicing reform, introduced through the Growth Opportunities Act (Wachstumschancengesetz) and regulated under the German VAT Act (Umsatzsteuergesetz, UStG).

For retailers, retail chains, Point-of-Sale (POS) software providers and e-Invoicing solution providers, the transition requires reviewing how business customer invoices are created, exchanged and stored.

Germany introduced the obligation to receive structured e-Invoices on January 1, 2025, followed by transitional periods for issuing them.

The implementation schedule is:

Until December 31, 2026, businesses may generally continue issuing paper invoices or, with the recipient's consent, invoices in other electronic formats, including ordinary PDFs.

Businesses whose turnover in the preceding calendar year does not exceed EUR 800,000 may continue using these alternatives until December 31, 2027. Certain Electronic Data Interchange (EDI) procedures also benefit from a transition period until that date.

Importantly, the EUR 800,000 threshold concerns the turnover of the invoice issuer in the preceding calendar year, rather than the value of an individual transaction.

The obligation primarily concerns taxable domestic B2B supplies between businesses established in Germany, as defined under Section 14 of the German VAT Act.

Retailers selling goods or services to other registered businesses must therefore determine whether their transactions require a structured e-Invoice.

However, the general B2B e-Invoicing mandate does not cover ordinary Business-to-Consumer (B2C) retail transactions.

Certain transactions are also exempt from the obligation to issue structured e-Invoices, including:

• VAT-exempt transactions covered by Section 4, numbers 8–29 of the German VAT Act.
• Low-value invoices not exceeding EUR 250, including VAT.
• Passenger transport tickets covered by Section 34 of the VAT Implementing Regulation (UStDV).
• Supplies made by businesses applying Germany's small-business VAT exemption scheme (Kleinunternehmerregelung).

Although qualifying small businesses are exempt from issuing structured e-Invoices, they must still be capable of receiving them.

Under Section 14 of the German VAT Act, an e-Invoice must contain structured electronic data that can be processed electronically.

Germany primarily uses two established formats:

XRechnung is a structured XML-based invoice format suitable for automated electronic processing.

ZUGFeRD is a hybrid format combining a human-readable PDF document with structured XML data. The structured component must meet the applicable requirements.

Both formats can satisfy the European electronic invoicing standard EN 16931.

Other formats may also be accepted where the legal conditions for interoperability and extraction of the required invoice information are fulfilled.

According to the German Federal Ministry of Finance, maintaining an email inbox is sufficient to satisfy the basic receiving capability requirement.

However, receiving an invoice and processing its structured data are separate operational activities.

For example, businesses may need software capable of reading XML invoice data and transferring relevant information into their accounting or Enterprise Resource Planning (ERP) systems.

e-Invoices must generally be retained for eight years under Section 14b of the German VAT Act.

The structured component must be preserved in a way that maintains its integrity and allows the tax administration to evaluate the information electronically.

For hybrid invoices, retaining the structured component may be sufficient, provided the additional PDF component contains no separate tax-relevant information requiring retention.

Businesses should therefore verify whether existing electronic archives preserve the required data rather than relying exclusively on PDF copies.

Impact on retailers and POS providers

For retailers, the practical impact depends on how business customer sales are processed.

A retailer may conduct most transactions with private consumers while occasionally issuing invoices to business customers. Those B2B transactions may fall within the e-Invoicing obligation even when the sale originates from a physical retail store.

This creates a distinction between ordinary POS receipt processing and the issuance of structured B2B invoices.

Retailers should review whether their POS, ERP or invoicing solutions can identify transactions requiring eE-Invoices, generate the appropriate structured data and transfer it through their invoicing workflows.

POS software providers and retail technology integrators should also assess whether integrations with external e-Invoicing systems are needed.

The reform does not automatically require every POS system to generate structured e-Invoices directly. The appropriate implementation depends on how the retailer's existing invoicing architecture operates.

For businesses with multiple stores or sales channels, consistent invoice processing across their systems will be particularly relevant.

What should businesses do?

Businesses operating in Germany should review their 2026 turnover to determine whether the January 2027 issuance deadline applies.

They should also identify domestic B2B transactions covered by the obligation, verify supported invoice formats and assess whether their POS, ERP and accounting systems can exchange the required structured data.

Existing electronic archives should be checked against the eight-year retention requirement.

For retailers and solution providers, preparation should focus on testing the complete invoicing process, from identifying an eligible transaction to issuing, receiving and storing the e-Invoice.

The immediate priority is to determine which business processes must change before January 1, 2027, and which can remain under the transitional arrangements until January 1, 2028.

From a retail compliance perspective, the main challenge is distinguishing transactions requiring structured e-Invoices from ordinary consumer sales and transactions covered by exemptions.

The approaching deadlines make it necessary to review existing invoicing processes before the remaining transitional periods expire.

Retailers should not assume that the ability to receive E-Invoices automatically means their systems are prepared to issue them.

Similarly, POS providers should consider whether existing software integrations can handle their customers' B2B invoicing requirements or whether they require additional development.

The principal legal basis is Sections 14, 14b and 27(38) of the German VAT Act (UStG), as amended by the Growth Opportunities Act. Source Source Source

Ivana Picajkić, Medior Legal Consultant at Fiscal Solutions

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