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Key points on e-invoicing

by | May 18, 2021

E-invoicing made easy: The following key points outline the basics of e-invoicing and help you to prepare for it.

What is an e-invoice?

An e-invoice transmits invoice data electronically and can be received and processed in an automated manner. The process is fully digitised, from the creation of an invoice to its payment.

An e-invoice presents invoice information in a structured, machine-readable data file, rather than on paper or in a fixed-layout format such as a PDF file. This ensures that information issued in this form can be

a) transmitted electronically,
b) received electronically,
c) further processed and presented for payment in an automated manner – electronically from start to finish.

Six key points

1. The legal basis for e-invoicing in Germany is the E-Invoicing Ordinance.

The federal E-Invoicing Ordinance (E-Rechnungsverordnung, ERechV) was adopted by the Federal Cabinet on 6 September 2017. The Ordinance specified the requirements of the E-Invoicing Act, thus completing the implementation of the EU Directive in German federal law. It also obliged invoice issuers, with effect from 27 November 2020, to send electronic invoices to public-sector customers of the federal administration.

The Ordinance also specifies requirements for the invoice data model, which must conform to the XRechnung data exchange standard or another standard which complies with European standard EN 16931.

The Federal Central Invoice Submission Portal (ZRE) can be used to send e-invoices to the direct federal administration, while the Online Access Act-compliant Invoice Submission Portal (OZG-RE) is used to send e-invoices to more than 100 organisations of the indirect federal administration as well as to funding recipients and to five federal states. In future, the invoice submission portals will also be accessible via the federal administrative portal, as stipulated in the E-Invoicing Ordinance.

2. An e-invoice is not a PDF file.

An e-invoice consists of invoice data in a structured, machine-readable data file.

As defined in Directive 2014/55/EU and in the E-Invoicing Ordinance, an electronic invoice is an invoice that has been issued, transmitted and received in a structured electronic format which allows for its automated and electronic processing.

An image file, PDF file or scanned paper invoice does not meet these statutory requirements.

3. E-invoicing means seamless electronic processing from start to finish.

E-invoicing contributes to the digital transformation of the federal administration. An e-invoice sent to the federal administration should be processed electronically in full, from invoice creation via processing, to final payment and archiving. This eliminates the cost of keeping manual records and avoids discontinuity of medium. E-invoices will therefore be a key component in the digital transformation of public invoicing and procurement processes.

Current developments clearly highlight the advantages of digital business processes. Advances in digital technology make it easier to delegate tasks and perform them anywhere, and reduce processing times. E-invoicing plays an important role here, supporting administrative and business processes and allowing work to be conducted remotely.

4. E-invoices must generally be issued using the XRechnung standard.

In general, invoices for the federal administration must be issued using the currently valid version of the XRechnung standard. Other standards may be used as long as they meet the requirements of the European standard (EN 16931), the terms of use for the invoice submission portals, and the requirements of the federal E-Invoicing Ordinance (e.g. ZUGFeRD version 2.1.1 or later in the XRECHNUNG profile).

The XRechnung standard was developed in a joint federal-level/state-level steering project. It is the German national version of the European standard EN 16931 and is sponsored by the Federal Government and state governments. Designed purely as a data format, XRechnung enables invoice data to be imported into the processing systems directly and seamlessly. A key purpose of the structured XML data file is to ensure machine readability. XRechnung is intended to standardise the handling of electronic invoices in public administration. It is an open-source standard maintained by the Coordination Office for IT Standards (KoSIT). It is available free of charge and is adaptable to future needs.

All information about the XRechnung standard can be found on the KoSIT website www.xoev.de/de/xrechnung (in German only).

5. Organisations of the direct federal administration receive e-invoices via the ZRE.

ZRE stands for Zentrale Rechnungseingangsplattform des Bundes, meaning “Federal Central Invoice Submission Portal”. Invoice issuers must use this portal to submit e-invoices to the direct federal administration.

To use the ZRE, invoice issuers must first register with the portal at https://xrechnung.bund.de/prod/authenticate.do and create a user account. Any natural person of legal capacity or any legal entity may register with the portal. Use of the ZRE in order to send e-invoices to authorities of the direct federal administration is mandatory.

The ZRE performs three tasks in the transmission process:

  • It receives e-invoices, via various possible transmission methods.
  • It validates the formal requirements of e-invoices (including invoice size, number and type of attachments, virus testing, completeness of mandatory information).
  • It transmits e-invoices to their recipients using a buyer reference (Leitweg-ID).

6. Authorities of the indirect federal administration may receive e-invoices via the OZG-RE.

In order to receive e-invoices, the authorities of the indirect federal administration may use a separate portal, which is placed at their disposal by the federal administration. It is called the Online Access Act-compliant Invoice Submission Portal (Onlinezugangsgesetz-konforme Rechnungseingangsplattform, OZG-RE). However, the use of this portal is not mandatory for authorities of the indirect federal administration; they are allowed to use their own solutions. A list of authorities that use the OZG-RE is available here (in German).

Invoice issuers can register with the OZG-RE at xrechnung-bdr.de and open a company account.

The OZG-RE essentially performs three tasks in the transmission of e-invoices:

  • It receives e-invoices, via various possible transmission methods.
  • It validates the formal requirements of e-invoices (including invoice size, number and type of attachments, virus testing, completeness of mandatory information).
  • It transmits e-invoices to their recipients using a buyer reference (Leitweg-ID).

Context

By 2022, the federal administration and the federal states are obliged to offer administrative services in Germany in digital form via administrative portals, creating user-friendly services for use by private individuals, businesses and the administration. To this end, the 575 most important services must be made available online. In addition, the administrative portals are to be linked to a common network, through which all administrative services can be accessed.

The legal basis for this is the Act to Improve Online Access to Administrative Services (Gesetz zur Verbesserung des Onlinezugangs zu Verwaltungsleistungen, OZG), which entered into force in August 2017. The federal administration and the federal states are jointly responsible for implementing the OZG, including the digital transformation programme launched by the IT Planning Council to provide online services.

Numerous services are currently being developed and tested under various government measures. One of these measures is to introduce e-invoicing within the federal administration – which will be important for driving the digital transformation of government administration.

More current information on the topic of e-invoicing

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Differences between paper, PDF and e-invoices

In this article, we explain what makes an invoice an e-invoice that is compliant with the Federal Government’s Regulation on Electronic Invoicing by comparing the differences between the various invoice formats.

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Current information

Further information on e-invoicing in the Federal Administration

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