All about e-invoices in the public sector

Since November 2019, federal contracting authorities have been obliged to accept electronic invoices. In April 2020, this obligation came into force for all public invoice recipients at the state and municipal level. This means that authorities, administrations and public companies can no longer refuse electronic invoices and are obliged to accept and process them. On November 27, 2020, the e-invoice finally became mandatory. From this date, authorities will accept only electronic invoices that comply with the European standard (EN 16931). In this blog post, you can find out exactly what you need to bear in mind when using e-invoices for public contracts.

What is a even a “genuine” electronic invoice?

An e-invoice enables the electronic transmission, automated acceptance, and further processing of invoice information. This allows a seamless digital process from invoice creation to payment. In contrast to paper invoices or image files such as PDFs, e-invoices present the invoice content in a structured, machine-readable format.

Accordingly, a PDF format is unfortunately no longer sufficient in the public sector. The legally stipulated format for transmitting invoices is the XRechnung (i.e., a structured data set in accordance with the requirements of the European standard EN-16931). However, the ZUGFeRD format is also compatible with the EU specifications.

Electronic invoice with XRechnung

The XRechnung standard is a specific format for electronic invoices that is based on the text-based XML data format. The structure of the XRechnung, and therefore the e-invoice, is defined by the European standard EN-16931. Each country develops its own Core Invoice Usage Specifications (CIUS) in order to harmonize EN-16931 with national requirements. The XRechnung is therefore the national implementation of EN-16931 for Germany.

Electronic invoice with ZUGFeRD

The ZUGFeRD format is a combination of PDF and XML file. Here, invoices are sent as PDFs and contain the XML data record for extracting the invoice data. This makes the format suitable for both visual inspection and the automated transfer of data to IT systems.

There are exceptions in these cases

In principle, contractors have had to submit electronic invoices to the federal government since November 27, 2020. However, there are also exceptions, which are set out in the ordinance:

• Invoices up to an amount of €1,000 after fulfillment of a direct order.
• Invoices that are subject to the exceptions (e.g., data subject to confidentiality or matters relating to the foreign service and procurement abroad).
• Invoices that are issued in proceedings against restraints of trade.
• Irrespective of the legal obligation, there may also be an obligation to submit e-invoices arising from the respective order or contractual relationship .