Germany e-invoicing 2027: the 1 January B2B mandate and your ERP checklist

Summary. From 1 January 2027, a German business whose 2026 total turnover exceeded €800,000 must issue structured e-invoices for domestic B2B supplies, under section 27(38) of the German VAT Act (UStG). Smaller businesses may keep using paper, or other formats with the buyer's consent, for 2027 supplies, and any business may keep using EDI with consent, until 31 December 2027. From 1 January 2028 the mandate is universal; receiving has been compulsory since 1 January 2025. Valid formats follow EN 16931: XRechnung, ZUGFeRD from version 2.0.1 except MINIMUM and BASIC WL, or Peppol BIS Billing. A plain PDF does not qualify. The Federal Ministry of Finance (BMF) issued a third letter on 15 October 2026, tightening what the XML must carry and setting relief dates of 31 December 2027 and 30 June 2030. Trade bodies want the 2027 date moved, but we found no bill doing so. SAP, Business Central, Dynamics 365 Finance and Zoho Books document German output, each with gaps; we found nothing for TallyPrime. Indian groups should scope the German entity, not the parent.

About this article. For finance and IT leads at German companies and foreign groups with a German entity. On 1 November 2026 we checked the UStG and UStDV on gesetze-im-internet.de (text last amended by the Act of 29 June 2026), the BMF letters of 15 October 2024, 2025 and 2026, KoSIT and FeRD pages, the EU's ViDA directive and vendor documentation. The BMF site refused automated requests, so we read its letters through the archived or mirrored copies referenced. This is not tax or legal advice; confirm thresholds with your Steuerberater. No vendor paid for inclusion. Researched with AI assistance and reviewed by our editorial team.

What changes on 1 January 2027, and what already applies

Section 14(2) no. 1 UStG requires an electronic invoice when supplier and business recipient are both established in Germany, and section 14(1) defines it as one issued, transmitted and received in a structured format that allows electronic processing. The 2024 Growth Opportunities Act (Wachstumschancengesetz) introduced this; the transitional rules in section 27(38) set who must comply when. Later dates come from the third letter and the EU's VAT in the Digital Age (ViDA) directive.

Is the date moving?

The skilled crafts association ZDH wants the 2027 step moved to 1 January 2028, citing a late EN 16931 revision and software problems; about two-thirds of firms in its survey report trouble receiving e-invoices. Saxon craft bodies repeated the call in October. On 1 November 2026 section 27(38) was unchanged and we found no bill. Plan on the statutory dates and check again in December.

Who counts as above €800,000?

The test is the issuing business's total turnover (Gesamtumsatz, section 19(2) UStG) in the previous calendar year; for 2027, that means 2026. Section 19(2) sums supplies within the scope of German VAT, measured on consideration received, less certain exempt supplies and fixed-asset sales. In a VAT group (Organschaft) the whole group's turnover counts; for a self-billing credit note, the issuer's.

At or below the line, 2027 supplies may still go on paper, or as a plain PDF if the buyer agrees. After 2027 an agreed format such as EDI counts only if the VAT data extracts correctly and completely into an EN 16931-compliant or interoperable format.

The year-end trap. The 2026 transition covers invoices transmitted by 31 December 2026; the small-business option covers only supplies made from 1 January 2027. A December 2026 supply first invoiced in January 2027 sits outside both, so on the literal text it needs an e-invoice even under €800,000. German tax group ETL agrees; the BMF letters do not address it directly. Send December invoices by 31 December if your ERP is not ready, and confirm with your adviser.

What the third BMF letter of 15 October 2026 adds

The letter follows those of 15 October 2024 and 2025 and amends the VAT Application Decree (UStAE). The BMF will review the rules once Germany's planned reporting system is specified.

• Service description in the XML. Type, scope, content and, where relevant, place of supply must be clear enough in the structured part to settle goods versus services, place of supply, the rate and, in principle, input VAT entitlement. Detail such as timesheets can go in an embedded attachment. The BMF recommends the KoSIT and FeRD mapping table for VAT fields.

• Advance invoices. Those issued before a business's own e-invoice duty starts need not be e-invoices, even if supply and payment come later.

• Final invoices. Until 30 June 2030, prepayments may be deducted as one total in BT-113 (paid amount), with detail in BT-22 (invoice note) or an embedded attachment the XML refers to.

• Construction. For now, trades and totals may sit in the XML if a human-readable embedded attachment holds the bill of quantities. No end date was given.

• Rebates. A general reference to a written rebate agreement is enough if the documents can be produced quickly.

• Gross-price invoices. XRechnung and ZUGFeRD have no gross-price format yet, so until 31 December 2027 totals per tax rate may replace line items in the XML, if a human-readable embedded attachment lists them.

• Corrections. If the original had to be an e-invoice, so does the correction. A self-billing credit note works if agreed in advance and it references the original.

• Business-rule errors. A file with a business-rule error but no format error is in principle still an e-invoice for VAT, but it needs complete and correct section 14 and 14a data. A format error makes it an other invoice.

• No fine for the wrong format. Issuing another invoice type is not an administrative offence under section 26a(2) no. 1 UStG. The exposure is the buyer's input VAT: such a document generally does not support deduction until corrected by an e-invoice, which relates back.

• Mass-market sellers. A seller is not challenged if it could not, with ordinary care, have known the buyer was a business. For continuing contracts, checking at contract start or change is enough.

• Public-sector buyers. VAT rules and public e-invoicing rules apply side by side; where they differ, follow the stricter one.

Scope: which invoices and which entities

A business is established in Germany through its seat, place of management, a fixed establishment involved in the supply or, failing a seat, residence (section 14(2) UStG). Baker Tilly adds that a VAT registration or postal address alone is generally not enough. The table also draws on the UStDV and the BMF's 2025 letter and FAQ.

Indian groups with a German entity: who must do what

The mandate follows the German establishment.

An integration built for India's GST e-invoicing does not produce a German e-invoice. Germany expects EN 16931 syntax (UBL or CII) or an agreed format that extracts into it, so plan a separate output path.

Formats: XRechnung, ZUGFeRD, Peppol and EDI

Status on 1 November 2026, from KoSIT, FeRD and the BMF's 2024 letter.

No channel is prescribed: email, Peppol, EDI and download portals all work. If a buyer refuses an e-invoice, the supplier's duty counts as met if a send log shows it tried to deliver.

Validation is not a legal duty, but the BMF recommends it. A careful business may rely on a suitable tool's result for format and business rules, and the BMF suggests keeping the report. It does not replace the content check: a wrong tax rate can pass.

Keep invoices for eight years from the end of the year of issue, with the structured part in its original form. Storing them outside a GoBD-compliant system is not itself a section 14b breach, but GoBD applies for other tax purposes. Printouts do not count.

ERP readiness: SAP, Microsoft Dynamics, Zoho and Tally

We read vendor documentation, not live systems, and a feature missing from a page may still exist. Test with real files.

SAP S/4HANA and SAP ERP

SAP's S/4HANA Cloud help (2608) says the Germany eInvoice (E-Mail) process defaults to the ZUGFeRD XRechnung profile, with another document type per partner, such as ZUGFeRD EN 16931 (COMFORT). The SAP ERP page sends XRechnung in CII as XML or embedded in a PDF, and requires the cloud edition of Document and Reporting Compliance. Inbound, SAP's S/4HANA notes list the formats in the table for invoices received by email.

SAP Business One

The product page lists XRechnung and ZUGFeRD and points to SAP Notes 2957995 and 3508245. The public guides are narrower. The XRechnung guide covers generating and sending, via Peppol and the cloud compliance service in Feature Package 2502. The ZUGFeRD guide covers importing received files only. If customers want a hybrid PDF, ask your partner or plan a conversion step.

Microsoft Dynamics 365 Business Central

Microsoft's page says the E-Document framework supports all three formats from version 26.3. Each Document Sending Profile takes one format, so one customer cannot have several. Inbound needs a separate E-Document Service per format, and purchase invoices need configuration or order matching. As XRechnung is listed as UBL only, test what happens when a supplier sends CII.

Microsoft Dynamics 365 Finance

Finance generates XRechnung through Electronic Reporting configurations: Sales Invoice DE (288.9.16.11 or later), Project Invoice DE (288.8.22.12) and Invoice model mapping (288.293). The legal entity's primary address must be in Germany, units and tax codes need UN/ECE Recommendation 20 and UNCL5305 codes, and invoices need a customer requisition. Plan a conversion step for hybrid PDFs.

Zoho Books

The German edition documents export and import in both formats, with ZUGFeRD import limited to one document at a time. Its overview also describes sending through Peppol. ZUGFeRD 2.3.0 is older than FeRD's 2.5.2, but versions do not expire, so the question is the profile, which these pages do not state. Validate an exported file.

Tally

TallyHelp's banner says TallyPrime 7.2 is live, and searches there for XRechnung and ZUGFeRD returned no results on 1 November 2026. Give the German entity a system with documented EN 16931 output, or a conversion service whose output you validate.

If this work rehosts your ERP, two more dates fall in the same window: Windows Server 2016 support ends on 12 January 2027, and EU Data Act switching charges end the same day.

The ERP checklist

Scope and data

1. Confirm each German entity's or VAT group's 2026 total turnover against €800,000 with your Steuerberater.

1. List every outbound stream: sales, credit notes, project, recurring, self-billing and corrections.

1. Clean master data (VAT ID or tax number, addresses, IBAN, buyer references) and map units and tax categories to UN/ECE Recommendation 20 and UNCL5305 codes.

1. Rewrite service descriptions so the XML alone shows type, scope and place of supply. An external link does not count, nor does a pointer to an attachment holding mandatory data.

Outbound

1. Pick a default format per segment: XRechnung for public buyers and XML-ready corporates, ZUGFeRD EN 16931 where people still read PDFs.

1. Validate every file against the current XRechnung bundle or FeRD package before sending, and keep the report and send log.

1. Embed attachments inside the e-invoice, not as separate email files, and issue corrections and credit notes as e-invoices that reference the original.

1. Check your December 2026 and January 2027 billing runs against the year-end trap above.

Inbound

1. Accept XRechnung (UBL and CII), ZUGFeRD and Peppol BIS, with one route per format if your ERP needs it.

1. Show approvers the XML; where a hybrid's PDF and XML differ, the XML wins.

1. Separate format, business-rule and content errors in accounts payable. RSM Ebner Stolz says automatic rejection of invalid files is now an open question, so decide who reviews them.

Archive and contracts

1. Archive the original XML for eight years with the validation report, in a store that also meets GoBD for non-VAT purposes.

1. Update contracts that still refer to paper or PDF invoices, and record consent where you rely on the 2027 options.

1. Test with your top 20 customers and suppliers before 1 January 2027 and again before 1 January 2028.

Worked example: is your German GmbH over the line?

An Indian SaaS group's German GmbH has these 2026 figures, net of VAT and received in 2026:

Business services are generally supplied where the customer runs its business (section 3a(2) UStG), which puts the parent's services outside section 19(2). So €620,000 + €45,000 = €665,000, and the GmbH may send paper, or PDFs with consent, for 2027 supplies. Count the €380,000 as well and the total is €1,045,000, which puts the GmbH in the mandate from 1 January 2027. A €380,000 classification question decides whether your deadline is 61 days or 426 days away, counted from 1 November 2026. Either way the GmbH must already receive e-invoices and needs compliant output by 1 January 2028, so building now only brings that work forward.

How eCorpIT can help

eCorpIT is a Gurugram-based technology organisation, founded in 2021, assessed at CMMI Level 5 and MSME certified, with senior-led engineering teams working across AWS, Microsoft and Google platforms. Our ERP development team builds XRechnung and ZUGFeRD output, conversion and validation pipelines for German entities, alongside your Steuerberater. Talk to us at /contact-us/.

Last updated: 1 November 2026.

References

1. Section 27 UStG, paragraph 38, transitional provisions — Gesetze im Internet

1. Letter of 15 October 2024, introduction of the mandatory e-invoice, archived copy captured 21 October 2024 — Federal Ministry of Finance, via Internet Archive

1. Letter of 15 October 2026, mandatory e-invoice, supplementary rules (GZ III C 5 - S 7287-a/00019/021/017), archived copy captured 16 October 2026 — Federal Ministry of Finance, via Internet Archive

1. Verschiebung der E-Rechnungspflicht auf den 1. Januar 2028 — Zentralverband des Deutschen Handwerks

1. Section 14 UStG, Ausstellung von Rechnungen — Gesetze im Internet

1. Council Directive (EU) 2025/516 of 11 March 2025 (ViDA), archived copy — Official Journal of the European Union, via Internet Archive

1. E-Rechnungspflicht 2027: Handwerk fordert ein Jahr Aufschub, 15 October 2026 — Deutsche Handwerks Zeitung

1. Section 19 UStG, paragraph 2, definition of Gesamtumsatz — Gesetze im Internet

1. E-Invoicing in Germany, Countdown to January 2027, 17 August 2026 — Baker Tilly Germany

1. E-Rechnung 2027 und 2028: Übergangsregeln und 800.000-Euro-Grenze — ETL

1. Pflichtangaben nach UStG und ihre Entsprechung in der EN16931 — KoSIT XStandards Einkauf

1. Letter of 15 October 2025, mandatory e-invoice and UStAE changes (GZ III C 2 - S 7287-a/00019/007/243), copy hosted by Steuerschroeder — Federal Ministry of Finance

1. Section 26a UStG, Bußgeldvorschriften — Gesetze im Internet

1. Section 33 UStDV, Rechnungen über Kleinbeträge — Gesetze im Internet

1. Section 34a UStDV, Rechnungen von Kleinunternehmern — Gesetze im Internet

1. Questions and answers on the mandatory e-invoice, status March 2026, archived copy captured 2 October 2026 — Federal Ministry of Finance, via Internet Archive

1. XRechnung versions and bundles — KoSIT XStandards Einkauf

1. ZUGFeRD/Factur-X standard and current information package — FeRD

1. ZUGFeRD FAQ: profiles, versions and validation — FeRD

1. Section 14b UStG, Aufbewahrung von Rechnungen — Gesetze im Internet

1. Maintaining Document Type for Business Partner, S/4HANA Cloud Public Edition, Germany — SAP Help Portal

1. Submitting Customer Invoices Using E-Mail (XML), SAP ERP, Germany — SAP Help Portal

1. Automated Creation of Electronic Documents for Supplier Invoices Received by E-Mail, S/4HANA — SAP Help Portal

1. Electronic Documents for Germany, SAP Business One 10.0 — SAP Help Portal

1. How to Create a XRechnung in the Germany Localization, version 1.2, 25 February 2025 — SAP

1. How to Work with ZUGFeRD Files in the Germany Localization of SAP Business One, version 1.0, 25 February 2025 — SAP

1. Electronic invoicing in Germany, Business Central, updated 12 October 2026 — Microsoft Learn

1. Customer electronic invoices in Germany, Dynamics 365 Finance — Microsoft Learn

1. Import and export transactions in ZUGFeRD format, Germany edition — Zoho Books

1. XRechnung 3.0.2, Germany edition — Zoho Books

1. E-Rechnung overview, Germany edition — Zoho Books

1. TallyHelp search results for XRechnung — Tally Solutions

1. TallyHelp search results for ZUGFeRD — Tally Solutions

1. Drittes BMF-Schreiben zur E-Rechnung, 26 October 2026 — RSM Ebner Stolz

1. Section 3a UStG, place of supply of services — Gesetze im Internet