The German e-Invoicing law (2014/55/EU) ensures that municipalities and public authorities must now switch to sending and receiving electronic invoices. The law states that from 18 April 2020, all local authorities in Germany must be able to receive and process electronic invoices.
April is fast approaching and yet many are still wondering what requirements now apply to the federal government, what exactly the e-Invoicing law says and what role PEPPOL is playing in this.
The E-Invoicing Law came into force on 27 November 2018. It states that from 27 November 2020, public clients, i.e. local authorities and government agencies, are obliged to switch to electronic invoicing. This affects the receipt, processing and dispatch of electronic invoices. The corresponding laws and ordinances of the individual federal states and the federal government will become legally binding by 17 April 2020.
The EU Directive 2014/55/EU, which came into force on 26 May 2014, obliges public authorities to receive and process their electronic invoices. According to the Commission, electronic invoicing should be the leading method by 2020. The Commission wanted to offer small and medium-sized enterprises the opportunity to benefit from the advantages of e-Invoicing, such as the savings potential.
Small and medium-sized companies should benefit in particular from the possibility of digitalizing their business processes.
As Dr. Ole Schröder, Parliamentary State Secretary at the Federal Ministry, already said:
“The federal e-Invoicing law is a further milestone in the federal government’s e-government strategy. Electronic invoicing contributes to an enormous reduction in bureaucracy, cost savings and faster processing of payments”
On 6 September 2017, the German government issued a regulation to supplement the e- invoices law and clarify various details.
This supplement is known as the e-Invoicing regulation.
As mentioned above, the e-Invoicing Law came into force on 27 November 2018. Since then, the regulations prescribed there have been valid for federal ministries and constitutional bodies. The E- invoices law has been in force for all federal authorities since November 2019.
Invoices of 1,000 € or more can be transferred to the federal government via e-Invoicing. From 27 November 2020, all suppliers who issue invoices to the federal government must submit them in certain formats, as so-called X-invoices.
The ZRE (= Zentrale Rechnungseingangsplattform des Bundes) was developed by the Federal Republic of Germany as a portal for electronic invoice exchange. This portal is intended to support the Federal Administration in invoicing and sending invoices, as well as in the conversion to e-Invoicing.
Since 20 November 2018, the ZRE (= Central Invoice Receiving Platform of the Federal Government) has been available to all companies involved in the purchasing of federal administrations. Via the portal xrechnung.bund.de all e-Invoices can be transferred to the federal administration as XRechnung. The ZRE functions as a central invoice receipt.
To send electronic invoices to public administrations in other European countries, the PEPPOL network is usually used. The EU-wide project PEPPOL (= Pan-European Public Procurement OnLine) enables internationally active companies to handle their communication in procurement processes electronically. In doing so, e-Invoices can be sent to public institutions or private companies.
Data or documents are exchanged by accessing the OpenPEPPOL network via access points. There are various providers which can connect you to the PEPPOL network. You can then communicate and exchange invoices with all PEPPOL subscribers connected to the network.
The PEPPOL network is already used by several European and international countries. The network has even been prescribed by the German regulatory authority in terms of B2G e-Invoicing.
What is “XRechnung”?
XRechnung is mostly used in exchange with authorities and local authorities, i.e. public administrations. The European Union’s requirement to introduce XRechnung as a standard is intended to create a basis for guaranteeing electronic data exchange in the public sector.
With Directive 2014/55/EU, Germany has started to introduce XRechnung as a standard norm and has committed itself to the EU norm. This standard is thus uniformly regulated for the federal government, the federal states and local authorities. The XRechnung is considered a future-proof standard, as it is available free of charge and through which clear & defined controls take place.
Are there alternatives to “XRechnung”?
Here the answer is: YES and NO!
In this case, the invoicing party can also use a different invoice format, the so-called ZUGFeRD 2.1 format. However, this only applies if the countries allow this in their invoices regulations and it is technically necessary. Invoices created with ZUGFeRD 2.1 must also comply with the EU standard. As a rule, ZUGFeRD 2.1 meets all standards that are also met by XRechnung. However, for public administrations, the XRechnung is mainly considered the standard format.
Does everyone have to be able to receive & send e-Invoices in the future?
The obligation to be able to receive and send e-Invoices currently only applies to the contracting authorities, such as municipalities and public authorities, of the so-called upper threshold area. However, as stipulated in the e-Invoicing law, all public administrations, including those in the sub-threshold area, must have switched over to sending and receiving electronic invoices by April 2020, or by November 2020 at the latest.
The obligation of the e-Invoicing law only ceases to apply if the order is a direct order (an order up to a value of €1000 and excluding VAT). Thus the e-Invoicing law applies from an order value of 1000€.
Do I need new software for the implementation?
No additional or new software is needed to convert to electronic data exchange for invoicing, only adaptations to the existing software will be necessary to generate, transfer and process the new invoice formats.
How do I migrate to eInvoicing?
Since no additional software is required for the conversion to e-invoicing, it is more likely that internal company adjustments will have to be made. First, an internal invoice receipt will be required and workflows for invoice management will have to be developed. In addition, an audit-proof archive is required.
Various service providers will support you in converting to electronic invoicing.
They will first check together with you:
INPOSIA can also support you in the conversion to e-Invoicing and is exactly the right partner for this.
Then get in touch with our e-Invoicing experts. We are happy to be there for you. By telephone, by e-mail or personally at your premises!
Muzaffer Havcarci
INPOSIA e-Invoicing Specialist
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