German E-Invoicing Penalties and Exemptions

The Wachstumschancengesetz established mandatory B2B e-invoicing for Germany, but not all businesses are treated equally and the penalty framework is more nuanced than many articles suggest. This guide gives you the facts, not the alarm.

Who Must Comply: The Scope

The German B2B e-invoice mandate applies to domestic B2B transactions where:

Both the supplier and the buyer are established in Germany
The transaction is subject to German VAT
The invoice amount exceeds the petty amounts threshold (€250 is not relevant for the mandate itself — all B2B invoices are covered regardless of amount)

Critically: The mandate applies to transactions within Germany. Cross-border invoices (German supplier, foreign customer or vice versa) are not covered by the German mandate and continue under existing rules (paper, PDF, EDI are all still valid for cross-border).

Who Is Exempt

The following are not covered by the German B2B e-invoice mandate:

B2C transactions: Invoices to private consumers are excluded. If your business sells primarily to consumers, the mandate does not affect your outbound invoicing (you still need to be able to receive e-invoices from B2B suppliers).

Small businesses (Kleinunternehmer): Businesses operating under the Kleinunternehmer regulation (§19 UStG) are exempt from the sending mandate. However, they must still be able to receive e-invoices if a B2B supplier sends one. This receiving obligation applies to all businesses from January 2025.

Invoices exempt from VAT under §4 UStG: Transactions that are VAT-exempt (certain financial services, healthcare, education) may have reduced obligations — check with your tax advisor for your specific situation.

Transactions below €250: These qualify as "Rechnungen über Kleinbeträge" (petty invoices) and can continue as PDFs or paper invoices. However, most businesses find it simpler to apply e-invoicing uniformly rather than maintaining two processes.

The Transitional Periods (Until 2028)

This is where many articles oversimplify. The Wachstumschancengesetz built in generous transitional periods for sending e-invoices:

Until 31 December 2025: Senders may continue sending PDF or paper invoices as long as the recipient agrees. The recipient must be able to receive e-invoices but is not obligated to process them.

Until 31 December 2026: Businesses with prior-year revenue below €800,000 may continue sending PDFs (if the recipient agrees). Larger businesses must start switching.

Until 31 December 2027: Businesses using EDI-based invoicing systems may continue using EDI if both parties agree, regardless of revenue.

From 1 January 2028: All transitional periods end. Every German B2B sender must issue structured e-invoices.

The receiving obligation has no transitional period — it was effective from 1 January 2025 for all businesses without exception.

Penalties for Non-Compliance

Here the law is deliberately quiet, which causes confusion. The Wachstumschancengesetz does not introduce a specific new penalty regime for e-invoicing non-compliance. Instead, existing tax law penalties apply:

If a supplier sends a PDF instead of an e-invoice after the deadline: The invoice is technically not a compliant Rechnung under German law. The buyer is not obligated to accept it, and the buyer may not be able to deduct input VAT on a non-compliant invoice.

For the sender: Issuing non-compliant invoices constitutes a tax infringement. Depending on the circumstances, this could lead to:

Disallowance of VAT deduction for the recipient
Administrative fines (Bußgelder) under §26a UStG — typically up to €10,000 per violation for systematic non-compliance
In cases of deliberate avoidance, more serious penalties under §370 AO (tax evasion)

For accounting practices: Sending non-compliant invoices may affect GoBD compliance, which in turn affects the deductibility of business expenses. The BMF has indicated it will take a pragmatic approach during the early transition years but expects full compliance by 2028.

Practical reality for 2025-2026: The BMF has signalled that enforcement will be proportionate and focused on establishing the infrastructure rather than penalising early teething issues. However, businesses should not treat the transitional periods as an excuse to do nothing — building technical capability takes time.

What You Should Do Regardless of Exemptions

Even if you are technically exempt from sending, you must be able to receive e-invoices from January 2025. This means:

Your accounting software must be able to open and read XRechnung XML or ZUGFeRD PDF/XML
Your accounts payable team must know how to process them
You must not refuse a supplier's e-invoice simply because you prefer PDF

Refusing to receive an e-invoice when it is technically compliant could create a payment dispute with your supplier. The courts would likely side with the supplier in most cases.