What you need to know about the Growth Opportunities Act and e-billing.
The Growth Opportunities Act is a major initiative of the German government aimed at promoting economic growth, easing the burden on companies and citizens and driving forward the digital transformation. A central element of the Growth Opportunities Act is the mandatory introduction of e-billing.
What is the Growth Opportunity Act?
The “Act to Strengthen Growth Opportunities, Investment and Innovation as well as Tax Simplification and Tax Fairness” (Growth Opportunities Act for short) was passed by the Bundestag on November 17, 2023 and approved by the Bundesrat on March 22, 2024. It comprises a large number of measures that include tax and administrative changes to stimulate investment, reduce bureaucracy and strengthen the competitiveness of the German economy.
As part of the changes in the area of VAT, the European Commission is planning an electronic reporting system. The data collected through e-invoices should be able to be fed into the planned reporting system.
Main objectives of the Growth Opportunities Act at a glance
Reducing bureaucracy: Companies should be freed from administrative burdens and the processing of business transactions should be simplified.
Tax relief: The law provides for various tax reliefs to promote investment and innovation.
Strengthening competitiveness: Companies should become more competitive through more efficient processes and reduced bureaucracy.
Promotion of digitization: The mandatory e-bill is intended to modernize and digitize business processes.
What is an e-bill?
An e-invoice, or electronic invoice, is a digital form of invoice creation and transmission. In contrast to traditional paper invoices, the e-invoice is created and transmitted in a standardized electronic format that can be processed automatically by computer systems. This digital processing enables faster and more efficient invoicing and processing, reduces errors and saves costs. To ensure that everything works smoothly with the e-invoice and that a clean exchange can take place, the e-invoices must comply with the European standard EN 16931.
The technical requirements for the e-bill
The European standard for electronic invoicing EN-16931 defines a specific data structure that contains all the necessary information for invoicing, such as invoice number, invoice date, supplier data, customer data, service description, amounts and taxes. EN-16931 specifies the use of the XML data format to make the data structure clear and machine-readable. This enables seamless integration into existing ERP systems and other business software solutions. Although the standard specifies a specific data structure, it also allows for extensions to integrate industry-specific requirements or additional information.
The XRechnung as a technical standard
In Germany, on the basis of EN 16931, the XRechnung which has been mandatory for suppliers and service providers who issue invoices to public clients since November 27, 2020. The XRechnung contains all the necessary information in a clearly defined XML format. This format is only used for machine processing. However, the data set can be made readable for humans by using visualization programs.
ZUGFeRD as a hybrid solution
With ZUGFeRD (Central User Guide of the Forum for Electronic Invoicing Germany) is a hybrides invoice formatwhich is the machine-readable XML data format through a PDF file supplemented. This means that a human-readable file is directly included. The Compliance with legal requirements for electronic invoices is thereby guaranteed by ZUGFeRD.
The e-invoicing obligation from 2025
E-invoicing is already mandatory in the public sector. From 2025, mandatory e-invoicing will now also be gradually introduced for the B2B sector. The Growth Opportunities Act has set the following dates for the implementation of mandatory e-invoicing:
From January 01, 2028: The Germany-wide obligation to send e-invoices comes into force for all B2B companies.
From January 1, 2025: All German companies are obliged to be able to receive and evaluate e-invoices without prior consent. The creation and sending of e-invoices is not yet mandatory.
From January 1, 2027: All German companies that generate a turnover of more than 800,000 euros per year are obliged to send e-invoices.
Conclusion
The Growth Opportunities Act and the promotion of e-billing are important steps on the way to digitizing the economy. Companies should use the opportunities that arise to optimize their processes, reduce costs and operate more sustainably. The planned switch to electronic invoices is an essential part of this transformation process and offers a wide range of benefits that go far beyond mere cost savings.