E-bill: What is the Growth Opportunities Act?

What is the Growth Opportunity Act?

The “Act to Strengthen Growth Opportunities, Investment and Innovation as well as Tax Simplification and 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 in order to investments to stimulate, reduce bureaucracy and strengthen the 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 bureaucracyCompanies should be freed from administrative burdens and the processing of business transactions should be simplified.

• Tax reliefThe law provides for various tax relief measures to promote investment and innovation.

• Strengthening competitivenessMore efficient processes and reduced bureaucracy should make companies more competitive.

• Promotion of digitizationMandatory e-billing is intended to modernize and digitize business processes.

What is an e-bill?

An e-invoice, or electronic invoiceis a digital form of invoice creation and transmission.
In contrast to traditional paper invoices, e-invoices are 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-bill and that a clean exchange can take placee-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 structurewhich contains all the necessary information for invoicing, such as invoice number, invoice date, supplier data, customer data, service description, amounts and taxes. The EN–16931 specifies the use of the XML data format fixedto make the data structure clear and machine-readable design.
This enables the Seamless integration into existing ERP systems and other business software solutions. Although the standard specifies a specific data structure, it also allows extensions to integrate industry-specific requirements or additional information.

The XInvoice 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-billing is already mandatory in the public sector.
From 2025, the E-billing obligation is now also being gradually introduced for the B2B sector.
The Growth Opportunities Act has set the following dates for the implementation of mandatory e-invoicing:

• As of January 01, 2025All 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 01, 2027All German companies that generate a turnover of more than 800,000 euros per year are obliged to send e-invoices.

• From January 01, 2028: The Germany-wide obligation to send e-invoices comes into force for all B2B companies.

Conclusion

The Growth Opportunities Act and the promotion of e-billing are important steps on the path to the digitization of the economy.
Unternehmen should take advantage of the opportunities that arise to optimize processes, reduce costs and more sustainable to act.
The planned The planned switch to electronic invoices is an essential part of this transformation process and offers many advantages that go far beyond pure cost savings.

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