Regulatory updates - Germany

On January 7, 2025, the state authorities of Bavaria announced adopting a single point of contact for invoice exchange, which aims to simplify invoicing, reduce throughput times, and speed up processing.

The chosen platform, OZG-RE, is currently used in other states such as Berlin, Brandenburg, Mecklenburg-West Pomerania, Saxony and Thuringia. OZG-RE has the following capabilities: web capture, upload, e-mail and sending via Peppol.

Although no exact date has been given, it is expected to happen in the first half of 2025.

After the amendments published in the Fourth Bureaucracy Reduction Act (Viertes Bürokratieentlastungsgesetz) gazetted on October 29, 2024, and the approval of the Annual Tax Act 2024 (Jahressteuergesetz 2024) on November 22, 2024, there will be several important updates, as of January 1, 2025.

Some of the most essential changes, among others, are listed below.

Retention times

Starting 1 January 2025, the required archiving retention time for invoices will decrease from ten to eight years, while the retention period for other documents, such as commercial books, inventories, and annual financial statements, will remain ten years.

This new regulation applies to invoices whose retention period has not expired by 31 December 2024 under the amendments in the Fourth Bureaucracy Reduction Act.

Updates for small businesses

Businesses under the Small business scheme (Kleinunternehmerregelung) are exempt from VAT. The new threshold to be eligible as a VAT-exempt small business is increased from a total annual turnover of no more than 22,000 EUR to 25,000 EUR for the previous fiscal year and from 50,000 EUR to 100,000 EUR for the current fiscal year. The changes follow the adoption of the Annual Tax Act and harmonization with EU legislation.

Small businesses below the threshold will also be excluded from the requirements to issue EN-compliant e-invoices. They can continue issuing other invoices, e.g., pdf via email or even paper. It’s important to note that these businesses remain in scope to receive EN-compliant e-invoices.

Earlier this year, the German Ministry of Finance (BMF) released a draft version of a letter detailing regulatory guidance on the upcoming e-invoicing mandate. The purpose of the early release was to increase public awareness about the mandate and offer guidance to taxpayers on what would be expected of them.

On 15 October 2024, the BMF officially published the final version of the letter. The content remains mostly the same as the draft version, with some rewordings, paragraph changes, and additional clarifications.

Some of the changes include:

• The new version of the letter clarifies that the storage of the image part of a hybrid invoice in its original form is mandatory if it contains relevant records for taxation, e.g., booking notes;
• The previous draft mentioned that providing an e-mail address was sufficient to comply with the requirement to receive e-invoices from 1 January 2025. The final version clarifies that it is not mandatory to have a separate electronic mailbox for receiving e-invoices;
• The electronic invoice format Peppol BIS is now mentioned as an example of other permittable European invoice formats, replacing the Italian format FatturaPA in the letter.