At the beginning of 2025, the use of e-invoices for certain domestic B2B transactions was introduced – accompanied by transitional rules for issuing such invoices. In its circular of 15/10/2025, the Federal Ministry of Finance (BMF) specified important technical details, in particular regarding format requirements, format errors and the treatment of self-billing (credit notes). We summarise the key points for you below.
What has applied since 1 January 2025?
Since 1 January 2025, domestic entrepreneurs are generally obliged to receive e-invoices for certain domestic B2B transactions – there is no transitional period for this obligation to receive e-invoices. By contrast, the obligation to issue e-invoices is phased in over time by transitional rules in § 27 para. 38 German VAT Act (UStG): many entrepreneurs may continue to use so-called “other invoices” for issuing invoices until the end of 2026 or 2027.
The BMF circular of 15/10/2025 – the second application circular on the e‑invoicing obligation following the introductory circular of 15/10/2024 – does not contain any fundamental legislative changes, but clarifies key technical issues that have caused uncertainty in practice.
Technical requirements: What is an e-invoice?
An invoice qualifies as an e‑invoice within the meaning of the law only if all of the following conditions are cumulatively met:
- It is issued in a structured electronic format.
- It enables automated electronic processing.
- It complies with the requirements of § 14 para. 1 sentence 6 UStG, i.e. it is based on the European standard EN 16931 (CEN format pursuant to Directive 2014/55/EU).
Permissible formats include in particular XRechnung and ZUGFeRD (with an embedded XML component). A pure PDF document without a structured data component does not meet these requirements and is regarded merely as an “other invoice” within the meaning of § 14 para. 1 sentence 1 UStG.
Clarifications on format errors
The BMF circular of 15/10/2025 clarifies under which circumstances an invoice, despite electronic transmission, is not recognised as an e‑invoice. This is in particular the case if:
- no permissible structured format is used (i.e. neither XRechnung nor ZUGFeRD with a correct XML component), or
- complete and correct data extraction is technically impossible.
In such cases, there is only an “other invoice” within the meaning of § 14 para. 1 sentence 1 UStG. For practice, the distinction made by the BMF between format errors and business rule errors is important: format errors mean that no e‑invoice exists – with possible consequences for input VAT deduction. Business rule errors, on the other hand, concern substantive deficiencies and only become relevant at a different level.
E‑invoicing obligation for credit notes
The BMF clarifies that the e‑invoicing obligation also covers credit notes, provided these are treated as invoices for VAT purposes. This means:
- Credit notes must also be issued in a permissible structured electronic format.
- A purely visual representation or a simple PDF is not sufficient in these cases.
Exceptions to the e‑invoicing obligation
The following continue to be exempt from the obligation to use e‑invoices:
- Low-value invoices up to EUR 250 (§ 33 German VAT Implementation Regulation – UStDV),
- Tickets for passenger transport (§ 34 UStDV),
- Invoices issued by small entrepreneurs: small entrepreneurs are exempt from the obligation to issue e‑invoices, but may voluntarily issue e‑invoices. Important: small entrepreneurs are, however, obliged to receive e‑invoices as from 1 January 2025.
Conclusion: Need for action for businesses
The BMF circular of 15/10/2025 does not introduce fundamental innovations, but provides important clarity on technical detail issues relating to the e‑invoicing obligation. In practice, this means that businesses should carefully review their invoicing processes and the systems they use and ensure that the formal requirements – in particular with regard to format compliance and data extractability – are reliably met.
Particular attention should be paid to the obligation to receive e‑invoices (which applies immediately without a transitional period) and the phased obligation to issue e‑invoices in accordance with the transitional rules.
Do you have questions about the e‑invoicing obligation or its practical implementation in your business? We will be happy to advise you – please contact us.
