E-invoicing in 2027 requires software testing now

E-invoicing in 2027 will initially affect businesses with total turnover of more than 800.000 Euro in 2026. From 1 January 2027, they will generally have to issue structured e-invoices for relevant domestic B2B transactions in Germany. All businesses should also check their incoming invoices, as a simple PDF could put input tax deduction at risk if the supplier was required to issue an e-invoice.

Who must issue an e-invoice from 2027?

Businesses with total turnover of more than 800.000 Euro in 2026 will generally have to issue e-invoices for domestic transactions between businesses in Germany from 1 January 2027. The relevant figure is total turnover in the previous calendar year.

The Bundesfinanzministerium (Federal Ministry of Finance) explained the next stage of the transition in its BMF-Schreiben dated 15 October 2026 on e-invoicing. This mainly concerns invoices for supplies between domestic businesses in Germany, in other words B2B transactions.

Businesses with prior-year turnover of no more than 800.000 Euro have another transitional year. They may continue to send paper invoices until 31 December 2027. A PDF is also permitted if the recipient agrees to this format. From 2028, the requirement will generally apply to these businesses as well.

The transitional provision applies only to sending invoices. All businesses in Germany have already been required to be able to receive e-invoices since 1 January 2025. From a technical perspective, an email inbox is initially sufficient, provided that the incoming structured files can be processed and retained.

Which data must be structured in an e-invoice in 2027?

All information required for VAT purposes must be included in the structured data section of the e-invoice. A reference to a contract, specification of services or other external document is not sufficient.

Structured means that the invoice information is not only visible, but also available in a machine-readable format. This allows accounting software to identify and process the data automatically. A simple PDF, by contrast, is merely a digital representation of the invoice.

According to the Federal Ministry of Finance’s application guidance, the structured data section must include information such as the names and addresses of the parties, invoice number, invoice date, description and date of supply, amount charged, tax rate and tax amount. This also applies if supplementary documents contain further details.

Formats compatible with the European standard EN 16931 are recognised. This standard defines the required technical structure of invoice data. XRechnung and ZUGFeRD are the most commonly used formats in Germany. With ZUGFeRD, a PDF also contains an embedded structured XML file.

When can a PDF put input tax deduction at risk?

A PDF can be problematic if the supplier was already required to issue an e-invoice. In that case, the PDF does not comply with the prescribed invoice format, even if all the information is visible in the document.

The Federal Ministry of Finance’s e-invoicing FAQ makes clear that a simple PDF is not an e-invoice. For invoice recipients, this means checking not only the content, but also the file format and the structured data set.

An incorrect invoice format does not automatically result in the permanent loss of input tax deduction in every case. However, it does create a tax risk. The Finanzamt (German tax office) may require a compliant invoice or a correction. The recipient should therefore promptly ask the supplier for a structured e-invoice and document the process.

This is particularly relevant for regularly recurring high-value incoming invoices, for example for materials, machinery, external services or construction work. In future, manually checking the visible PDF will no longer be sufficient in these cases. The accounting department must be able to identify whether a valid XML file is present and whether it contains the mandatory information.

How should you test your e-invoicing software before the deadline?

Do not only test whether your software can create or open a file. Use realistic sample invoices to check whether the structured data is complete, complies with the standard and reaches your accounting and archiving systems without manual transfer.

A useful test should cover at least the following points:

• Outgoing invoice: Can the system create an XRechnung or a permitted ZUGFeRD profile?
• Mandatory fields: Are the date of supply, tax amount, tax rate and invoice number included in the structured data set?
• Incoming invoice checks: Does the software identify invalid XML files, missing mandatory information and PDFs without structured data?
• Further processing: Are the supplier, invoice number, amounts and due date transferred correctly to the accounting system?
• Documentation: Are the original file, validation result and any invoice correction stored in a traceable manner?

Test several scenarios. These should include a standard invoice for goods, a credit note, an invoice with several tax rates and a faulty test file. You should also establish who will contact a supplier if only a PDF or an incomplete data set is received.

If invoices currently arrive by email, on paper and through various portals, the process should be clarified before purchasing software. Digitalising existing invoice and approval processes can help replace paper lists and duplicate data entry. ibx company advises small and medium-sized businesses in Hanover and the surrounding region on selecting and introducing such processes.

Which exceptions and transitional provisions remain in place?

Low-value invoices of up to 250 Euro may continue to be issued as other types of invoice. Technical non-objection provisions also apply to certain advance payment invoices, final invoices and extensive construction accounts, in some cases until 30 June 2030.

A non-objection provision does not automatically postpone every e-invoicing requirement. It applies to specific technical difficulties involving the types of invoice mentioned. Businesses should therefore check whether their particular case is covered by the BMF requirements rather than assuming that the deadline is extended to 2030 in all cases.

Start by reviewing your current position: check the turnover threshold, record the types of invoice you use, identify your software version and test three to five sample cases. Then plan any updates, interfaces and responsibilities. This will leave time to make corrections before 1 January 2027.

If you would like to review your current process with us, you can arrange a no-obligation initial consultation about e-invoicing software. This can clarify which steps are actually necessary and what your existing software already covers.