Germany's E-Invoicing Rules for Freelancers and Small Businesses

Germany's e-invoicing rules raise two different questions: Can you receive an electronic invoice? And must you issue one? Confusing them can make a freelancer buy the wrong software or miss an obligation that already applies.

This guide explains the deadlines, the special position of Kleinunternehmer, and how to choose between ZUGFeRD and XRechnung. It focuses on everyday German domestic business-to-business billing, with a separate section for public-sector clients.

Reviewed on 4 October 2026 against the official sources linked below. General information, not individual tax advice.

Receiving e-invoices is already part of running a business

Since 1 January 2025, domestic German businesses have needed to be able to receive e-invoices. That includes freelancers and businesses using the Kleinunternehmer VAT exemption. An email inbox is sufficient for receiving them; the rules do not require fully automated bookkeeping. You still need a way to inspect and retain what arrives. BMF FAQ, questions 8, 9 and 12.

In practice, give suppliers an invoice email address and decide who checks it. If you receive XML, use a viewer rather than treating an unfamiliar attachment as a broken PDF. The tax administration provides an ELSTER e-invoice viewer for XRechnung and ZUGFeRD.

When do you have to issue an e-invoice?

For ordinary domestic B2B transactions within the mandate, the transition is:

• Through 31 December 2026: issuers can still use paper, or an ordinary PDF with the recipient's consent.
• During 2027: that paper/PDF option continues if the issuer's total turnover, calculated under § 19(2) UStG, in the previous calendar year was no more than €800,000. For 2027, the relevant figure is your 2026 turnover, not your profit or the customer's turnover.
• From 1 January 2028: the general transitions end. Covered domestic B2B transactions require structured e-invoices, unless an exemption applies.

A separate transition permits certain EDI exchanges through 2027. The rules refer to both the period of supply and the transmission deadline; do not assume a late invoice automatically inherits an earlier year's transition. § 27(38) UStG.

For example, a VAT-registered designer with €60,000 of relevant 2026 turnover normally has the additional year for ordinary 2027 B2B invoices. A consultancy above €800,000 does not have that paper/PDF extension. Neither example changes the receiving requirement.

Which transactions are covered?

The central case is a transaction taxable in Germany between two domestically established businesses, with the customer buying for its business. Being a solo freelancer does not itself create an exemption. A German VAT number alone does not establish that an overseas business is domestically established.

Ordinary consumer sales fall outside this domestic B2B mandate. Transactions with a non-domestic party need a separate assessment; other countries' requirements may still matter. Certain VAT-exempt supplies under § 4 numbers 8–29 UStG are excluded, but “no VAT shown” is not a general exemption: domestic reverse-charge transactions can still be covered. BMF's 2025 guidance, sections 14.1(3)–(6).

Qualifying small invoices with a total of €250 or less, including VAT, may remain paper or other electronic invoices. That is the whole invoice, not each line. The simplification has exceptions, including reverse-charge supplies under § 13b. § 33 UStDV.

Kleinunternehmer: exempt from issuing, not from receiving

Freelancer, small business and Kleinunternehmer do not mean the same thing. Kleinunternehmer refers to the VAT exemption under § 19 UStG. A business can be small and still use the regular VAT rules, including because it opted out of the exemption. § 19 UStG.

For supplies exempt under § 19(1), § 34a UStDV allows an invoice to remain an “other invoice.” This is an ongoing exception under current law, not a deadline that expires in 2028. Paper remains possible; an ordinary PDF requires the recipient's consent. You can nevertheless issue structured e-invoices voluntarily. Your invoice still needs the applicable small-business VAT-exemption notice. § 34a UStDV and BMF's 2025 guidance, paragraph 22.

So the €800,000 transition and Kleinunternehmer status answer different questions. A regular VAT business below €800,000 gets more transition time; a qualifying Kleinunternehmer has a separate issuing exception. A client's procurement contract and public-sector rules may impose additional requirements.

A normal PDF is not a structured e-invoice

An e-invoice supplies invoice data in a format that software can process as defined fields. Exporting a Word invoice to PDF, scanning paper or adding selectable text does not create that structured data. A PDF can still be permissible under a transition or exception; it simply is not automatically an E-Rechnung. Federal guidance on PDF and electronic invoices.

ZUGFeRD and XRechnung are both recognised options. The BMF accepts ZUGFeRD from version 2.0.1, excluding the MINIMUM and BASIC-WL profiles. Neither a file extension nor the label “ZUGFeRD” is sufficient on its own. BMF FAQ, question 7.

ZUGFeRD or XRechnung: which should you choose?

ZUGFeRD combines readable PDF/A-3 pages with embedded invoice XML and is technically aligned with Factur-X. People can read the pages while accounting software processes the data. FeRD's ZUGFeRD explanation.

XRechnung is a structured XML standard, with German requirements built on EN 16931. It supports the UBL and CII syntaxes; a viewer can display its contents. It is widely used by public authorities, but businesses may use it too. Germany's B2B mandate does not require XRechnung specifically. KoSIT's standard overview and B2B FAQ.

Our practical recommendation is:

• Ordinary business client, no prescribed format: ZUGFeRD with the EN 16931 profile is a useful starting point when you want both readable pages and structured data.
• Client explicitly requests XRechnung: use XRechnung and obtain its submission instructions and buyer reference.
• Government client: check the authority's requirements before preparing the first invoice. Follow the section below rather than assuming any hybrid PDF will work.

Ask one concrete question during onboarding: “Which invoice format and delivery channel does your accounts-payable team accept?” Record the answer with the customer's billing details.

The ZUGFeRD profiles, explained

A profile determines the scope of the structured data:

• EN 16931 (COMFORT): the European core invoice model; a sensible default for ordinary freelance billing.
• BASIC: fewer fields, suitable for straightforward German VAT invoices. Confirm it covers your transaction and recipient's needs.
• EXTENDED: extra data for complex processes. Agree its use with the recipient.
• MINIMUM and BASIC WL: insufficient structured content for Germany's e-invoice obligation.
• XRECHNUNG reference profile: packages XML conforming to the separate XRechnung specification; public portals may require XML alone.

See FeRD's profile guide. BASIC and BASIC WL are different; EXTENDED is not automatically better.

Use a version accepted by the recipient's system. A newly published specification may be a prerelease rather than the version a public portal accepts; KoSIT publishes the XRechnung release status.

Public-sector clients have separate rules

Government procurement rules run alongside VAT law. A VAT transition or Kleinunternehmer exception does not automatically remove a public-sector obligation. Federal suppliers have generally needed e-invoices since November 2020, subject to exceptions; Germany's states have their own requirements. Federal overview and state guidance.

For a federal customer, XRechnung is the standard route. Alternatives must satisfy the relevant technical, legal and portal requirements. Federal guidance specifically says that a ZUGFeRD invoice in the XRECHNUNG profile must be submitted as structured XML without the PDF wrapper. Do not upload an ordinary ZUGFeRD PDF and assume it will be accepted. Federal e-invoicing FAQ.

Ask the authority for its accepted format/version, submission channel, order reference and Leitweg-ID where required. That routing identifier belongs to the receiving authority; a supplier does not need its own. Ordinary B2B invoicing does not require a Leitweg-ID, though XRechnung's BT-10 Buyer Reference field still needs an appropriate value. KoSIT's buyer-reference FAQ.

Check and keep the actual electronic invoice

For hybrid invoices, the XML is the leading invoice data if it differs from the visible PDF. Check the structured contents as well as the page layout. BMF FAQ, question 12a.

Required VAT invoice details belong in the structured data. A timesheet PDF can supplement the service description, but cannot replace required fields. BMF's 2025 guidance, paragraph 35.

Technical validation helps catch malformed files, missing fields and inconsistent calculations. It cannot decide whether you used the correct tax treatment or actually supplied the work described. KoSIT's explanation of technical and substantive conformity.

Incoming and outgoing invoices generally have an eight-year VAT retention period, counted from the end of the year of issue. Other retention provisions can also apply. § 14b UStG.

Keep the structured part intact in its original form. A printout or screenshot is not a substitute. BMF FAQ, question 13. A practical habit is to preserve the complete original XML or hybrid PDF, back it up, and agree the bookkeeping handover with your tax adviser. Storing a file inside an invoicing app does not by itself establish that your entire retention process meets every requirement.

Prepare your workflow before the deadline

You can make the change manageable without treating every invoice as a technical project:

1. Classify your clients. Separate ordinary domestic businesses, private consumers, public authorities and overseas customers.
2. Confirm your own position. Establish whether you use the Kleinunternehmer exemption and, if not, which transition applies.
3. Collect billing requirements early. Store the correct legal name, address, tax details and any required order or buyer reference.
4. Generate one representative invoice. Check its structured data and ask the customer whether their system processes it correctly.
5. Keep the delivery and retention steps repeatable. Know where the original file goes, how you back it up and how your accountant receives it.

For hourly work, accurate time records and meaningful task descriptions make that preparation easier. They give you the hours and service details you need when it is time to invoice.

Bring tracked work and invoicing together on your Mac

TimeBill connects projects, customers, tracked time and invoice preparation in a native Mac app. Start each invoice from the work you have recorded, with the customer and project details already at hand.

E-invoicing preview: the export workflow below is prepared for the upcoming TimeBill release. Check its availability in your installed version before planning a live submission.

Our e-invoicing setup guide explains this workflow for ZUGFeRD's EN 16931 profile and standalone XRechnung XML. It also covers the Kleinunternehmer setting. The hybrid export uses EN 16931; it does not offer a picker for every ZUGFeRD profile described above.

For public-sector work, the XRechnung setup instructions cover the buyer reference and portal submission. In this workflow, standalone XML export requires TimeBill Premium in the Mac App Store edition. Generating a file and submitting it to the customer's system are separate steps; TimeBill does not provide Peppol delivery.

The Invoice Vault keeps generated documents available for review and re-export. It is not a substitute for your wider bookkeeping and retention process. To show the Kleinunternehmer exemption note on the visible PDF as well as in the XML, follow the additional-notes step in the setup guide.

Explore TimeBill for Mac to bring time tracking and invoice preparation into one workflow. Check the supported export workflow against your customers' requirements before relying on it for a particular contract.