BMF Clarifications on Germany’s E-Invoicing Mandate (June 2025 Draft)

Clarifications from BMF on E-Invoicing

As required by EU Directive EN 16931 and the Wachstumschancengesetz, (Growth Opportunities Act), Germany started requiring B2B e-invoicing on January 1, 2025. To provide clarification on implementation, the BMF released a second draft letter on June 25, 2025, following the issuance of formal guidance in October 2024.This guide covers the key clarifications businesses need to know.-

Scope & Phasing of the Mandate

Reception required from Jan 1, 2025: All German resident businesses—or foreign businesses with a German permanent establishment—must be capable of receiving machine-readable structured invoices (EN 16931 compliant) 

Issuance timeline:

• From 2025–2027, high-turnover businesses (> €800,000) must issue structured e-invoices.
• From 2028, the requirement extends to all German businesses, regardless of size

Clarifications in the June 2025 Draft Letter

Small Buildings Exemptions

Micro-businesses under the § 19 threshold (around €22 000 turnover): not required to issue e‑invoices, though they must be capable of receiving them.

Low‑Value & Passenger‑Transport Invoices

Invoices under €250 and tickets for passenger transport remain exempt from structured e‑invoicing, but suppliers may issue compliant e‑invoices voluntarily and recipients must accept them without prior agreement.

Mixed‑supply Invoices

Invoices combining both in‑scope and out‑of‑scope items must fully meet e‑invoicing requirements.

Format Standards & Error Handling

EN 16931 Compliance

Acceptable formats include XRechnung, ZUGFeRD 2.0.1+ (Germany), and other EU-recognised schemas like Peppol BIS and Factur‑X/Fattur‑PA if compliant with EN 16931.

Handling Invalid E‑Invoices

Format or missing-data errors no longer render an e‑invoice completely invalid. They are still valid for VAT purposes but may require correction. VAT deduction is preserved even if corrected retrospectively.

Receipt & VAT Deduction Rules

To receive e‑invoices, a dedicated inbox is not required—providing a standard email address is enough.

Only the machine-readable structured data qualifies for automatic VAT deduction. Human-readable PDF or paper attachments do not meet the deduction requirements.

Construction Sector & Special Cases

The June letter includes clarifications on corrective invoices in the construction industry: corrections must be issued in the same structured format as the original invoice.

Draft Consultation & Timeline

The draft consultation is open until mid‑August 2025, and the final guidance letter (BMF Schreiben) is expected by Q4 2025, ahead of full implementation in 2028.

What Businesses Should Do Now

• Examine the profiles of your suppliers and customers to determine if they qualify for the low-value or small-business exemptions.
• Make sure that systems support validated EN16931 formats (XRechnung, ZUGFeRD, Peppol BIS) in order to implement e-invoice capability.
• Teach finance employees how to spot non-compliant invoices and make the necessary corrections.
• Confirm invoice reception process—an email address suffices, but ensure that your system can ingest, validate, and archive structured XML.
• Monitor final guidance: stay tuned for the finalized BMF Schreiben expected in Q4 2025.

Summary table:

Topic	Clarification (June 2025 Draft)
Small business exemption	Under €22 000 turnover not required to issue e‑invoices
Low‑value/transport invoices	Under €250 or tickets exempt; e-invoices allowed voluntarily
Mixed‑supply invoices	Must comply fully with structured format
Rejecting non‑compliant	Not outright invalid; correction is possible to preserve VAT deduction
Receipt channel	Email inbox suffices; no dedicated portal required
VAT deduction basis	Only machine‑readable component qualifies
Format standards	XRechnung, ZUGFeRD 2.0.1+, Peppol BIS, etc., all aligned with EN 16931
Construction corrections	Must be re-issued via structured e‑invoice
Timeline	Consultation until Aug 2025; final letter by Q4 2025; full rollout by 2028

Conclusion

A major step toward digitizing its VAT system and bringing it into compliance with EU standards is Germany's decision to require B2B e-invoicing.- In order to help businesses better prepare for the phased rollout through 2028, the BMF's June 2025 draft letter provides much-needed clarification on scope, technical requirements, and exemptions. Businesses, should now concentrate on maintaining technical readiness, educating employees, and keeping abreast of the final guidelines. Proactive action now will guarantee seamless compliance and put companies in a position to gain from increased invoicing efficiency and transparency.