German e-invoicing for foreign companies and subsidiaries: what applies in 2025, 2027 and 2028

As of 3 October 2026, the German e-invoicing mandate applies to businesses established in Germany: a German subsidiary, or a branch that is involved in the supply, has had to be able to receive structured e-invoices since 1 January 2025 and must issue them for domestic B2B sales from 2027 (prior-year turnover above €800,000) or 2028 (everyone else). A foreign company with only a German VAT registration is not obliged to issue or receive e-invoices, except for taxable lettings of German real estate (sources: § 14 and § 27(38) UStG, BMF FAQ, VAT Application Decree).

This guide is for CFOs and finance operations teams in groups headquartered outside Germany. Every date and threshold comes from the statute or the Federal Ministry of Finance (BMF) and is linked at the end; the underlying data is in our EU e-invoicing tracker (see the Germany page), which we re-check monthly.

Does German e-invoicing apply to foreign companies?

German e-invoicing applies to a foreign group’s entities only where both the business that issues the invoice and the business that receives it are established in Germany. German VAT law does not ask who owns a company or where the group is headquartered. For a foreign group, that produces four typical cases.

Your set-up in Germany	Receive e-invoices	Issue e-invoices (domestic B2B)	Main reference
German subsidiary (GmbH, AG, KG …)	Yes, since 1 January 2025	From 2027 or 2028, depending on its own 2026 turnover	§ 14(2) UStG, § 27(38) UStG
German branch or other permanent establishment of a foreign company	Yes, for supplies the branch is involved in	Yes, for supplies the branch is involved in, same deadlines	§ 14(2) sentence 3 UStG, BMF letter 2024 para. 13
Foreign company with only a German VAT registration	No obligation	No obligation; exception for taxable lettings of German real estate (see below)	BMF letter 2024 paras. 13 and 16, BMF FAQ question 3
Foreign company without German registration, selling to German customers	No obligation	No obligation under German law; for reverse-charge supplies by an EU-based supplier, the invoicing rules of its home member state apply	§ 14(7) UStG

If your group has several German entities, the test applies to each separately, and for the issuing deadline each entity’s own turnover counts unless they form a German VAT group.

What does “established in Germany” mean?

Section 14(2) of the German VAT Act (UStG) defines a business established in Germany as one that has its registered office (seat), its place of management, or a permanent establishment that is involved in the supply in Germany, or, failing a seat, its residence or habitual abode there. The territories listed in § 1(3) UStG count as Germany for this purpose.

Three points matter for foreign groups.

A subsidiary is always established. A German GmbH has its seat in Germany, whoever holds the shares and wherever its accounting is done.

A branch counts only for the supplies it is involved in. The BMF refers to the VAT definition of a permanent establishment in the VAT Application Decree (section 3a.1(3) UStAE) and applies the test per supply. A foreign company with a German branch is therefore established in Germany for the sales and purchases that the branch takes part in, and not automatically for business that the head office does with German customers without the branch’s involvement.

A VAT number is not an establishment. A foreign company registered for VAT in Germany is not established there merely because of that registration. The BMF FAQ allows such businesses to say so on their invoices, and a customer acting with due care may rely on that statement.

When one party is not established in Germany, there is no obligation to issue an e-invoice; the invoice can be on paper or, with the recipient’s consent, electronic, including PDF (BMF letter of 15 October 2024, paragraph 16).

Since when must German entities receive e-invoices?

Since 1 January 2025, every business established in Germany must be able to receive e-invoices. Unlike issuing, receiving has no transition period (BMF letter 2024, paragraph 62). The obligation covers small businesses under the § 19 UStG scheme and businesses that make only exempt supplies, such as residential landlords.

The technical bar is low: an e-mail inbox is enough, and it need not be reserved for e-invoices. The law prescribes no channel; e-mail, interfaces, portal downloads or shared access to a central storage location within a group are all possible, as agreed between the parties.

Two consequences are easy to overlook:

• A recipient cannot opt out. If a German entity refuses an e-invoice or cannot process it, it has no right to ask for a paper invoice instead. The supplier has fulfilled its VAT obligations once it has issued an e-invoice and can show that it tried to deliver it, for example with a sending log (BMF letter 2024, paragraph 42).
• “Receiving” includes reading and keeping. An XRechnung is a pure XML file with no human-readable page. The BMF points to viewers, including the free viewer of the tax administration at e-rechnung.elster.de. With hybrid formats such as ZUGFeRD, the XML part now prevails over the PDF if the two differ, so an approval workflow that shows only the PDF can show figures that are not legally the invoice.

If accounts payable sits in a shared service centre abroad, the channel can be centralised; the legal recipient remains the German entity. What happens after receipt, from validation to the archive, is set out for eight countries in our guide from e-invoice to archive.

Issuing: 2027 or 2028, and how the €800,000 test works

A German entity must issue e-invoices for domestic B2B supplies made from 1 January 2027 if its total turnover in 2026 exceeded €800,000, and from 1 January 2028 otherwise. The obligation to issue e-invoices for domestic B2B supplies has applied in law since 1 January 2025, but § 27(38) UStG allows other invoices during a transition. The deadlines depend on when the supply is made, when the invoice is issued and, for 2027, on the issuer’s turnover.

Supply made in	Paper or other formats (e.g. PDF) allowed?	Condition
2025 or 2026	Yes, for every business	Invoice issued by 31 December 2026; a PDF or other non-EN 16931 electronic format needs the recipient’s consent, paper does not
2027	Only if the issuer’s total turnover in 2026 was not more than €800,000	Invoice issued by 31 December 2027; same consent rule
2027	EDI invoices that do not meet the format rules, for every business	Recipient’s consent; invoice issued by 31 December 2027
From 1 January 2028	No	E-invoice required for all domestic B2B supplies in scope

Which turnover counts. The threshold refers to the Gesamtumsatz under § 19(2) UStG of the business that issues the invoice, in the previous calendar year. That is the sum of its taxable supplies under § 1(1) No. 1 UStG, calculated on consideration received, minus certain exempt supplies. It is not group revenue and not consolidated turnover. One exception matters for groups: if German entities form a VAT group (Organschaft), the turnover of the whole VAT group counts (BMF letter 2024, paragraph 64). For self-billing, the turnover of the business issuing the self-billed invoice counts; for invoices issued by a third party, that of the business on whose behalf it acts.

Which supplies are covered. The obligation applies where a VAT invoice is required: supplies to another business for its business purposes. The BMF confirms that this includes cases that are easy to miss:

• domestic reverse-charge supplies under § 13b UStG between two businesses established in Germany;
• self-billing (credit notes in the VAT sense);
• tax-exempt supplies under § 4 Nos. 1 to 7 UStG, such as an intra-Community supply from Germany to the establishment of another German business in another member state;
• invoices that cover partly taxable and partly exempt supplies.

What stays outside. Invoices with a gross total of up to €250 (§ 33 UStDV), passenger tickets, invoices issued by small businesses under § 19 UStG, supplies exempt under § 4 Nos. 8 to 29 UStG (for example many financial services and lettings; a letting that the landlord makes taxable by opting under § 9(1) UStG is inside the scope, according to the BMF letter of 15 October 2025, paragraph 17), supplies to consumers, and supplies to legal entities that are not businesses. Down-payment invoices issued before an entity’s deadline need not be e-invoices, even if supply and payment follow later (BMF FAQ, question 7b).

Intra-group invoices. Charges between German entities that are not in the same VAT group are ordinary supplies and need e-invoices once the transition ends. Within a German VAT group, internal transactions are not taxable; documents showing VAT for them are internal booking vouchers, not invoices (VAT Application Decree section 14.1(1), as amended by the BMF letter of 15 October 2025).

The customer’s side. If a supplier issues a paper or PDF invoice after its transition has ended, that invoice is not a proper invoice and in principle does not entitle the customer to deduct input VAT until it is corrected by an e-invoice (BMF letter 2024, paragraphs 56 and 57). A customer is not challenged if it could assume that the supplier was still allowed to use the transition. However, the BMF says the customer must take into account what it knows, including the known size of the supplier and knowledge gained from affiliated company structures (paragraph 59).

EDI: what changes on 1 January 2028

EDI invoices to German business customers count as e-invoices after 2027 only if all VAT data can be extracted correctly and completely into a format that complies with EN 16931. Where invoices to German customers run through EDI, for example EDIFACT, German law distinguishes two cases.

An EDI format qualifies as an e-invoice permanently if it allows the correct and complete extraction of all VAT data into a format that complies with EN 16931 or is interoperable with it (§ 14(1) sentence 6 No. 2 UStG). Such EDI flows can continue after 2027.

EDI formats that do not meet this test are covered by the separate transition in § 27(38) No. 3 UStG: with the recipient’s consent, they remain allowed for supplies made up to 31 December 2027, provided the invoice is issued by that date. From supplies made on 1 January 2028, they no longer count as e-invoices. The question for your EDI provider is whether the message maps completely to EN 16931.

XRechnung, ZUGFeRD and other formats: what Germany accepts

Since 2025, an e-invoice is an invoice issued, transmitted and received in a structured electronic format that allows electronic processing (§ 14(1) UStG). A plain PDF is not an e-invoice.

Format	Domestic B2B (VAT law)	Invoices to federal authorities
XRechnung (German specification of EN 16931, pure XML)	Accepted	Default standard
ZUGFeRD 2.0.1 or later (PDF/A-3 with embedded XML)	Accepted, except the MINIMUM and BASIC-WL profiles	Only the XRECHNUNG profile, submitted as a pure XML file
Other EN 16931 formats, e.g. Factur-X, Peppol BIS Billing	Accepted (named by the BMF as examples)	Accepted if EN 16931-compliant and within the portal’s rules
Agreed formats such as EDI	Accepted if all VAT data can be extracted correctly and completely	Not an alternative to the portal
PDF, scanned image, paper	Not an e-invoice; allowed only in the transition and for exempt cases	Not accepted

A few details from the BMF letters avoid common mistakes:

• All mandatory VAT details must be in the structured part. A reference to an attachment or an external link is not enough; supporting detail such as timesheets may be attached.
• Validation helps but is not a legal condition. A business acting with due care may rely on a suitable validation tool and should keep the validation report (BMF letter 2025, paragraph 35a).
• No Leitweg-ID in B2B. In B2B, a placeholder such as “-” in the field BT-10 (buyer reference) is sufficient for VAT purposes (BMF FAQ, question 6).

One EN 16931 output, such as Peppol BIS Billing, can therefore serve German customers as well as other countries. Formats by country are in the EU e-invoicing tracker.

German VAT registration only: do foreign companies need e-invoices?

A foreign company whose only link to Germany is a VAT registration has no obligation to issue or receive e-invoices there; the one exception in the BMF’s guidance concerns taxable lettings of German real estate. Many foreign businesses are VAT-registered in Germany without a subsidiary or branch, and for them the mandate has limited direct effect.

Foreign company with only a German VAT registration

• No obligation to issue e-invoices to German businesses, except for taxable lettings of German real estate
• No obligation to be able to receive e-invoices
• German suppliers may invoice on paper, or electronically with your consent
• Reverse-charge supplies from an EU-based company: invoicing rules of its home member state apply (§ 14(7) UStG)
• Still keeps invoices for eight years and names an EU storage location

German subsidiary or involved branch

• Must issue e-invoices to German businesses from 2027 or 2028
• Must be able to receive e-invoices since 1 January 2025
• German suppliers may send e-invoices without asking for consent
• Customers lose input VAT on non-compliant invoices after the transition
• Keeps invoices for eight years, in Germany or in the EU with online access

A few points still need attention:

• Say it on the invoice. The BMF FAQ (question 3) explicitly allows a note that the business has no fixed establishment in Germany. Customers may rely on it.
• Your suppliers can still send e-invoices. Nothing stops a German supplier from sending you an XRechnung if you agree, so being able to read XML is useful even without an obligation.
• Retention still applies. § 14b UStG requires every business, not only established ones, to keep invoices for eight years. A business not established in Germany must determine where in the EU the invoices are kept and provide them to the tax office on request.
• Re-check when the set-up changes. Opening a German branch or moving management functions to Germany changes the test. From that point, the branch is in scope for the supplies it is involved in.

Do foreign property companies letting German real estate need e-invoices?

A foreign company that owns German real estate and lets it with VAT is treated as established in Germany for those lettings, so it must issue e-invoices to German business tenants once its transition ends. The rule does not come from § 14 UStG itself but from the VAT Application Decree (UStAE), the administration’s binding guidance for tax offices:

"Unternehmer, die ein im Inland gelegenes Grundstück besitzen und steuerpflichtig vermieten, sind insoweit als im Inland ansässig zu behandeln."

In English: businesses that own real estate in Germany and let it subject to VAT are to be treated as established in Germany to that extent. (UStAE section 13b.11(2) sentence 2, BMF VAT handbook 2024)

The section was written for the reverse-charge rules, but the BMF letter of 15 October 2024 points to it when it defines which businesses are established in Germany for e-invoicing (paragraph 13), and the letter of 15 October 2025 did not change that paragraph. What follows for a foreign landlord, for example a Luxembourg or Dutch property company with a German office building:

• Taxable lettings to business tenants: in scope. Where the landlord has opted to charge VAT under § 9(1) UStG, a letting to a tenant established in Germany is a domestic B2B supply that needs an e-invoice; the BMF letter of 15 October 2025 (paragraph 17) confirms that supplies made taxable by such an option are covered. The general transition applies, and the €800,000 test uses the landlord’s own total turnover in 2026.
• VAT-exempt lettings: outside the issuing obligation, like all supplies exempt under § 4 Nos. 8 to 29 UStG. The BMF names the landlord of a residential flat as an example of a business with only exempt supplies.
• Other business of the same company: unaffected. The rule applies “to that extent”, that is, to the taxable lettings only.
• Receiving: the BMF texts we checked do not say whether such a company must be able to receive e-invoices for purchases related to the property. Being able to read XML invoices avoids the question; confirm the legal position with your German tax adviser.

Common claim: "Non-resident companies are exempt from German e-invoicing." What the sources say: true for a mere VAT registration (BMF letter of 15 October 2024, paragraph 16; BMF FAQ, question 3), but not for taxable lettings of German real estate, which the VAT Application Decree treats as made by a business established in Germany.

The wording of section 13b.11 quoted above is taken from the BMF’s official VAT handbook 2024, checked on 3 October 2026; the BMF letter of 15 October 2025, which amended the e-invoicing sections of the decree, does not change it. This section is information, not tax advice.

Selling to German public authorities: federal level and the Länder

Suppliers to German federal authorities, whether established in Germany or not, have had to send e-invoices since 27 November 2020; each federal state sets its own rules for its own authorities. Public-sector invoices follow a separate track: the VAT Act and the federal E-Invoicing Ordinance (ERechV) apply side by side (BMF FAQ, question 4a).

At federal level, suppliers have had to issue e-invoices to federal contracting authorities since 27 November 2020 (§ 3 ERechV in conjunction with § 11(3) ERechV). The ERechV makes no distinction by where the supplier is established. Invoices after direct orders up to €1,000 are exempt. The default format is XRechnung; other formats that meet EN 16931 are allowed (§ 4(1) ERechV). Invoices to the direct federal administration go through the federal invoice portal OZG-RE, which requires prior registration and offers Peppol, e-mail, upload and a web form. The invoice must carry the authority’s Leitweg-ID.

The federal states (Länder) implement e-invoicing for their own authorities and municipalities under their own law. The Federal Procurement Office points out that requirements for suppliers can differ considerably between states, and recommends asking the contracting authority directly about the legal position and the Leitweg-ID to use.

One operational point: the federal portal deletes invoices 28 days after they were provided or after their last status change. It is a delivery channel, not an archive.

Archiving: eight years for invoices, ten for books

In Germany, invoices must be kept for eight years and books and annual accounts for ten years, as of 3 October 2026. The rules in detail:

• Invoices: eight years. § 14b(1) UStG requires every business to keep a copy of each invoice issued and every invoice received for eight years, counted from the end of the calendar year in which the invoice was issued. The period was cut from ten years by the Fourth Bureaucracy Relief Act (BGBl. 2024 I No. 323) and applies to all invoices whose old period had not expired by 31 December 2024 (§ 27(40) UStG).
• Accounting vouchers: eight years; books and annual accounts: ten. Under § 147(3) AO, books, records, inventories and annual accounts are kept for ten years, accounting vouchers (Buchungsbelege) for eight, and the other listed documents, such as business letters, for six. Retention does not end while the documents are relevant for a tax assessment that is still open.
• Banks, insurers and investment firms keep accounting vouchers for ten years under the tax code (Art. 97 § 19a(3) EGAO); the eight-year VAT period for their invoices applies only from 1 January 2026 (§ 27(40) UStG).

Common claim: "German invoices must be kept for ten years." What the sources say: eight years under § 14b(1) UStG since 1 January 2025. The FAQ of the federal invoice portal still cited ten years under § 14b UStG when we checked it on 3 October 2026; the statute is the binding text.

What to keep. At least the structured part of each e-invoice (the XML) must be kept unaltered in the format in which it was received, so that its authenticity, integrity and legibility are ensured for the whole period, and the tax authority must be able to evaluate it by machine. The PDF part of a hybrid invoice needs to be kept only if it contains additional tax-relevant information, for example booking notes. Converting an invoice to another format, such as TIFF, must not delete the XML (GoBD as amended by the BMF letter of 14 July 2025). Storing e-invoices outside a GoBD-compliant system is not in itself a breach of VAT law, but the GoBD apply under the tax code. Our guide to e-invoice archiving requirements compares these rules with seven other countries.

Where to keep it. A business established in Germany keeps its invoices in Germany. It may keep them electronically in another EU member state if the tax authority has full online access, and must tell the tax office where they are (§ 14b(2) UStG). Keeping electronic books and records outside the EU, for example on a US or UK server of the parent company, requires the tax office’s approval on application (§ 146(2b) AO, referred to in § 14b(5) UStG).

An archive or document management system that keeps the original XML, shows a readable version and links both to the booking covers these points; our DMS finder filters vendors by e-invoice formats and archiving evidence.

Penalties and the input VAT risk

German VAT law has no penalty specific to e-invoicing. The risks lie elsewhere:

• Input VAT for your customers. After a supplier’s transition has ended, a paper or PDF invoice where an e-invoice is required is not a proper invoice. The customer in principle cannot deduct input VAT from it until the supplier corrects it with an e-invoice.
• Administrative fines. Failing, intentionally or recklessly, to issue a required invoice on time, or failing to keep invoices for eight years, is an administrative offence with a fine of up to €5,000 (§ 26a(2) Nos. 1 and 2 and (3) UStG).
• Data access in audits. Under § 147(6) AO, auditors may demand tax-relevant data in a machine-evaluable format. Without the XML originals, that demand cannot be met for e-invoices.

A timeline for your German entity

Germany’s e-invoicing timeline runs from mandatory e-invoices to federal authorities in 2020 to mandatory issuing for all domestic B2B supplies in scope from 2028.

1. 27 Nov 2020Federal B2G e-invoicingE-invoices mandatory for suppliers of federal contracting authorities (direct orders up to €1,000 exempt).
2. 1 Jan 2025Receiving mandatory, eight-year retentionEvery business established in Germany must be able to receive e-invoices; invoices are kept for eight years instead of ten.
3. 31 Dec 2026End of the general transitionLast day to issue paper or PDF invoices for supplies made in 2025 and 2026.
4. 1 Jan 2027Issuing for larger entitiesEntities with 2026 total turnover above €800,000 must issue e-invoices for domestic B2B supplies.
5. 1 Jan 2028Issuing for all, end of EDI reliefAll remaining entities in scope; EDI that does not meet the format rules no longer counts.
6. 1 Jul 2030ViDA digital reportingEU reporting requirements for cross-border B2B transactions, based on e-invoices.

Practical steps for a foreign group

A foreign group prepares for Germany in seven steps, starting with a list of every German entity and registration and ending with tests before the issuing deadline.

1. List every German entity and registrationSubsidiaries, branches, VAT-only registrations, VAT group membership. Note for each whether it is established in Germany.
2. Determine 2026 total turnover per entityUnder § 19(2) UStG, not consolidated revenue; for a VAT group, the whole group. This decides 2027 or 2028.
3. Fix the receiving set-up nowMailbox or channel per entity, a viewer for XML, and rules for which part (XML or PDF) your approval workflow uses.
4. Map invoice flows to German customersBilling system, EDI connections, self-billing, intra-group charges and reverse-charge supplies. Ask whether each can produce EN 16931 data.
5. Choose formats and channelsXRechnung, ZUGFeRD or another EN 16931 format for B2B; XRechnung via OZG-RE for federal customers; Länder rules per customer.
6. Check the archiveXML originals kept unaltered for eight years, machine-evaluable, stored in Germany or in the EU with online access; approval for storage outside the EU.
7. Test with key customers before your deadlineValidate sample invoices, keep the validation reports, and agree the channel in writing.

Steps 1 to 3 are overdue if not done, because receiving has been mandatory since January 2025. For steps 4 to 7, an entity likely to exceed €800,000 in 2026 needs to be ready for its first supply in 2027.

Germany inside a multi-country programme: France, Poland, Belgium

Belgium, France and Poland also tie their mandates to establishment in the country, but unlike Germany each prescribes a channel, and their dates differ.

Country	Status (3 October 2026)	How invoices are exchanged	Details
Germany	Receiving since 2025; issuing from 2027 or 2028	No prescribed channel; EN 16931 formats or qualifying EDI	Germany
Belgium	Structured e-invoices between Belgian VAT-liable businesses since 1 January 2026	Peppol network	Belgium
France	All businesses must receive from 1 September 2026; large and mid-sized companies issue from then, SMEs and micro-businesses from 1 September 2027	Through an approved platform (plateforme agréée)	France
Poland	KSeF mandatory from 1 February 2026 (2024 sales above PLN 200 million) and 1 April 2026 (others)	Government platform KSeF	Poland

Three consequences for planning:

1. One legal entity can be in scope in one country and out of scope in another. A French company with a German VAT registration but no German establishment is in the French mandate and outside the German one. Map obligations per entity and country; each country page states, with sources, whether a mere VAT registration is caught.
2. Germany is the most permissive channel, so it rarely drives the architecture. A provider chosen for Peppol in Belgium or KSeF in Poland can cover Germany too if it delivers EN 16931 data by a channel your German customers accept. An e-mail-based German process does not satisfy Belgium, France or Poland.
3. Cross-border invoices change in 2030. Under ViDA (Directive (EU) 2025/516), digital reporting requirements for cross-border B2B transactions apply from 1 July 2030. Cross-border charges between group companies, untouched by the German domestic rules, are B2B transactions within that scope. Our ViDA page summarises what is confirmed.

The readiness check takes your entities, countries, turnover and headcount and returns one dated plan with the source for each obligation, plus a calendar file. It runs in your browser. The calendar and change log show when a date moves.

Summary

For a foreign group, Germany is mainly a classification task. Only entities established in Germany are in scope; each must already receive and read XML invoices. Each entity’s 2026 total turnover under German VAT rules, not group revenue, decides between January 2027 and January 2028. Check EDI against the extraction test before 2028, keep XML originals for eight years in Germany or the EU, and seek approval for any archive outside the EU. A VAT-only registration stays outside the mandate, except for taxable lettings of German real estate.

The statements in this guide reflect the law and BMF guidance as of 3 October 2026. They are information, not legal or tax advice; for decisions on a specific entity, involve your German tax adviser.