New German Coalition Government announces intention to implement B2B e-invoicing

The new "traffic light" Coalition Government in Germany has announced its intention to implement mandatory B2B e-invoicing as soon as possible. The centre-left Social Democrats (SPD), the Greens (Bündnis 90/Die Grüne) and the Free Democrats (FDP) will jointly form the next German government and replace the current “Grand Coalition” led by Angela Merkel.   

The “traffic light coalition” (as the colours of the three parties are red, yellow and green) led by Olaf Scholz, presented its Governing Agreement document which includes a paragraph on introducing as soon as possible “… an electronic reporting system nationwide, which will be used for the creation, verification and forwarding of invoices. In this way, we will significantly reduce the susceptibility to fraud of our VAT system and modernise and at the same time reduce the bureaucracy of the interface between the administration and the businesses." 

The Governing Agreement document presented still needs to be approved by each of the parties’ leadership or members and this process is expected to be completed by early December 2021, after which Olaf Scholz and his new government can be sworn in. The Agreement is not legally binding but sets the agreed legislative priorities. Germany would need to make relevant changes to its Fiscal Code and also obtain permission from the European Commission before making e-invoicing mandatory. 

Germany already mandates e-invoicing for B2G. It will be interesting to see if Germany will scale their existing e-invoicing platform (Zentrale Rechnungseingangsplattform des Bundes (ZRE) and e-invoicing standard (ZUGFeRD) for B2B. This was the approach Italy took when it scaled its existing SDI platform from B2G to wider B2B use.

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