Last updated: August 2026
Many companies ticked e-invoicing off their list back in early 2025: set up an inbox for incoming invoices, job done. That sense of security is misleading. The obligation to receive e-invoices was only the first stage of a plan that runs until 2028.
The real turning point comes on 1 January 2027. From that date, companies with more than €800,000 in prior-year revenue must issue every domestic B2B invoice as a structured e-invoice. Anyone still sending PDF invoices today has less than five months to make the switch.
For project service providers this is not purely an accounting matter. Every invoice originates in project data: hours, rates, service periods. The changeover therefore has a direct effect at project level:
- Invoices generated from projects must be created in a standardised, machine-readable format
- Format errors jeopardise your clients' input tax deduction and strain the client relationship
- Rejected invoices extend payment terms and worsen your liquidity
- Every client may require a different format: XRechnung, ZUGFeRD or a portal
- Managing formats manually costs time per invoice that nobody can bill
The e-invoicing mandate at a glance:
- The obligation to receive e-invoices has applied to all domestic B2B companies since 1 January 2025
- Paper and PDF invoices remain permitted only until 31 December 2026, and PDF only with the recipient's consent
- From 1 January 2027 the obligation to issue applies to companies with more than €800,000 in prior-year revenue
- From 1 January 2028 the obligation to issue applies to all domestic B2B transactions
Which e-invoicing deadlines apply through 2028?
German lawmakers introduced the e-invoicing mandate in stages through the Growth Opportunities Act (Wachstumschancengesetz). The transition periods apply exclusively to issuing invoices. There was never a transition period for receiving them.
Since 2025: the obligation to receive, with no transition period
Since 1 January 2025, every domestic company must be able to receive and process e-invoices. This applies regardless of revenue and legal form, so it also covers small businesses under the Kleinunternehmer rule. Consent to receive an e-invoice has not been required since then.
At the same time the definition shifted. Since 1 January 2025, a PDF invoice sent by email explicitly no longer qualifies as an e-invoice in the eyes of the law. It counts as an "other invoice".
2026: the last full year for paper and PDF
Until 31 December 2026, all companies may still send their outgoing invoices on paper or as a PDF. For PDF invoices you need the recipient's consent. In practice, many larger clients already require standard-compliant formats, in some cases through their own portals.
Anyone who waits until December 2026 to start underestimates the effort involved. Choosing a format, mapping mandatory fields per client, running test invoices and aligning with accounting all take lead time.
What changes in 2027 under the e-invoicing mandate?
The general transition period ends on 1 January 2027. From that cut-off date, companies with prior-year revenue above €800,000 must issue their domestic B2B invoices as structured e-invoices. Paper and PDF are no longer an option for these companies.
The €800,000 threshold: your 2026 revenue decides
What counts is total revenue in the preceding calendar year. For the obligation starting 1 January 2027, that means your 2026 revenue. A consultancy with 25 employees is well above this threshold at standard day rates. For most IT consultancies, management consultancies and engineering firms with roughly five to ten employees and up, 2027 is therefore the relevant cut-off date, not some distant 2028.
Check this now, with an eye on your current 2026 revenue. If you are close to the threshold, do not make the changeover dependent on your annual financial statements. Your clients have been ready to receive e-invoices since 2025 in any case.
Who remains exempt
Three exemptions remain in place after 2027 as well:
- Small businesses under Section 19 of the German VAT Act (UStG) are exempt from the obligation to issue. The obligation to receive still applies to them.
- Small-value invoices up to €250 may still be issued as "other invoices" under Section 33 UStDV, for example on paper.
- Transport tickets under Section 34 UStDV also remain exempt.
Invoices to private customers (B2C) are not covered by the mandate. Here, electronic invoicing still requires consent.
Outlook for 2028: obligation to issue for everyone
From 1 January 2028, the obligation to issue applies to all domestic B2B transactions, regardless of revenue. EDI procedures will then only be permitted if an exemption applies or the required information can be extracted in a standard-compliant way. By that point at the latest, every company must be able to issue structured invoices.
What legally counts as an e-invoice?
Section 14 UStG defines an e-invoice as an invoice issued, transmitted and received in a structured electronic format that enables electronic processing. The format must comply with the European standard EN 16931 or be agreed between the contracting parties in a standard-compliant way.
The structured data set is what matters. A scanned document or a simple PDF does not meet this requirement, no matter how clean it looks.
Permitted formats: XRechnung and ZUGFeRD
Two standard formats have become established in Germany. XRechnung is a pure XML format and has been mandatory nationwide for invoices to public sector clients since November 2020. ZUGFeRD is a hybrid format: a machine-readable XML file embedded in a human-readable PDF/A-3 document. Where the two differ, the XML part takes legal precedence.
ZUGFeRD is permitted from version 2.0.1 onwards; the MINIMUM and BASIC-WL profiles explicitly do not meet the legal requirements. Other EN 16931-compliant European formats such as Factur-X or Peppol BIS are also allowed. You will find a detailed comparison in the article on electronic invoice formats.
The mandatory content of an invoice does not change with e-invoicing. The same requirements apply as when writing a conventional invoice: full names and addresses, sequential invoice number, description of services, date of supply, net amount, tax rate and tax number or VAT ID.
Archiving: eight years in the original format
E-invoices are subject to audit-proof archiving under the German GoBD rules. The structured XML part must be stored unaltered and in its original format for at least eight years. A folder in your mail client is not enough. A document management system that assigns invoices to the relevant project and client is the sensible option.
Why the changeover stalls in project businesses
The legal position has been known since 2024. Even so, implementation is moving slowly in many project organisations. The reason rarely lies in understanding the rules. It lies in day-to-day execution with tools that were never built for the job.
Format errors jeopardise your clients' input tax deduction
The German Federal Ministry of Finance clarified the requirements in its circular of 15 October 2025. It distinguishes between format errors and business rule errors. A format error turns the file into an "other invoice". The recipient then loses the input tax deduction unless they have consented to a different invoice form.
For you as the issuer this means a faulty e-invoice is not a cosmetic flaw. It creates a tax problem for your client, leads to rejections and delays your payment. On a project with €40,000 in invoice volume and a three-week delay, that is a noticeable liquidity effect.
Three processes for the same task
A typical picture at an IT service provider with 15 clients: five public sector clients require XRechnung via a portal. Two corporate clients accept only ZUGFeRD. The rest still receive PDFs by email, with consent, until the end of 2026.
Without integrated invoicing, every billing run means checking the client's format, generating the invoice manually in the right format and uploading it manually to portals. Three different processes for the same task, at more than 20 minutes of effort per invoice. Excel invoice templates and Word mail merges cannot serve any of these routes.
On top of that, the format requirements of public sector clients are inconsistent. Some federal states accept ZUGFeRD profiles, others require XRechnung exclusively via a state portal. If a single mandatory field such as the buyer reference is missing, the invoice is rejected and the process starts over.
Incoming invoices become the second problem area
The obligation to receive has been in force for eighteen months. In practice, mixed formats keep arriving: correct ZUGFeRD, PDFs without consent, XRechnung as an XML attachment. Without a defined validation step, everything lands in the books unchecked. That is precisely where the input tax risk arises on your side.
So establish format validation as a fixed step in your incoming invoice process, before an invoice is released for payment. Agree with your tax adviser how you handle and document non-compliant incoming invoices.
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E-invoices straight from the project: how to prepare
For project service providers, the most sensible place for an e-invoice to originate is where the data already sits: in the project. When project time tracking, service records and billing share one data basis, the format is merely an output setting. No broken handovers, no format expertise required from individual project managers.
In ZEP you define the invoice format once per client. The invoicing module generates either an XRechnung as an XML file or a ZUGFeRD invoice as a PDF/A with embedded XML from the booked project hours and receipts. ZEP supports ZUGFeRD versions 2.0.1 through 2.3.2. Project-specific mandatory fields are stored in the client or project master data and flow automatically into the invoice XML.
The effect in daily work: after the initial configuration, format selection runs automatically. ZEP actively flags missing invoice items, and released service periods are locked until billing is complete. Via the DATEV interface, all billing-relevant data goes straight to accounting. That turns the mandate into an end-to-end project-to-bill process instead of a third silo alongside time tracking and accounting.
Conclusion: your next steps before January 2027
Only a few months remain before the cut-off date. These four steps will get you safely through the changeover:
- Establish whether you are affected: check your expected total revenue for 2026. If it exceeds €800,000, the obligation to issue applies to you from 1 January 2027.
- Record client requirements: document the required format and transmission route for each client, including portals and mandatory fields.
- Integrate your invoicing process: connect time tracking and invoicing in one system so that formats are produced automatically and without errors.
- Secure intake and archiving: define a format check for incoming invoices and ensure eight years of audit-proof archiving.
Anyone who completes these points in autumn 2026 will experience January 2027 as an ordinary billing month.
Note: this article reflects the position as of August 2026 and does not constitute tax or legal advice. Please clarify individual cases with your tax adviser.
FAQs
Does the e-invoicing mandate also apply to small businesses under Section 19 UStG?
Partly. Small businesses under Section 19 UStG are permanently exempt from the obligation to issue e-invoices. The obligation to receive them applies to them nonetheless: since 1 January 2025 they must be able to accept, process and archive their suppliers' e-invoices in an audit-proof manner.
What applies from 2027 to SMEs with less than €800,000 in prior-year revenue?
For these companies the transition period is extended by one year. They may continue to issue paper or PDF invoices until 31 December 2027, with PDF only subject to the recipient's consent. From 1 January 2028, the obligation to issue applies to them too, without exception.
From when must companies with more than €800,000 in revenue send e-invoices?
From 1 January 2027. What counts is total revenue in the preceding calendar year, so for the 2027 cut-off date that means 2026 revenue. All domestic B2B transactions are affected. Invoices must be issued in an EN 16931-compliant format such as XRechnung or ZUGFeRD.
What do corporate groups need to consider under the e-invoicing mandate?
The €800,000 threshold applies per entrepreneur in the VAT sense. In the case of a VAT group (Organschaft), the revenue of the entire group is decisive. Groups with several legal entities should also ensure format capability per entity, including consistent archiving and interfaces to accounting for each company.
Can I still send PDF invoices to business customers in 2026?
Yes, until 31 December 2026, but only with the recipient's consent. Since 1 January 2025 a PDF invoice no longer qualifies as an e-invoice within the meaning of Section 14 UStG. Many larger clients therefore already require standard-compliant formats such as XRechnung or ZUGFeRD.
What happens if I do not issue e-invoices from 2027?
An invoice in the wrong format legally counts as an "other invoice". Your client cannot claim an input tax deduction from it and will usually reject the invoice. The result is correction work, delayed payments and strained client relationships. You also fail to meet your VAT obligations.
