1 Classification
On 15 October 2025 – exactly one year after the publication of its first (German) Federal Ministry of Finance’s letter (see also KMLZ VAT Newsletter 39 | 2024) – the Federal Ministry of Finance released a second letter on the obligatory use of electronic invoices for domestic B2B transactions. On the one hand, the new legal provisions on e-invoicing, effective since 1 January 2025, and the letter dated 2024 are now incorporated into the German Administrative VAT Guidelines. On the other hand, the current letter provides further support and clarifies new requirements, especially regarding the validation of e-invoices. The final version differs in several points from the draft published in June 2025 (see also KMLZ VAT Newsletter 22 | 2025).
2 Validation and Error Categories
The current Federal Ministry’s letter places even greater emphasis, than the earlier draft did, on the need for technical validation of e-invoices. It explains what companies should look for when checking incoming invoices, in order to avoid risking input VAT deduction and in determining whether an invoice qualifies as a valid e-invoice under German VAT law.
This means that a technical component will be introduced into the verification of e-invoices. In addition to the usual checks for completeness and accuracy of obligatory invoice elements under Sections 14 and 14a of the German VAT Act, checks of the semantics and syntax of the e-invoice will also be necessary.
The Federal Ministry of Finance defines three kinds of errors which can occur in e-invoices:
- Format errors: These occur when an e-invoice does not comply with the required syntax, respectively the technical specifications.
- Business rule errors: Business rules are technical issues related to logical dependencies between data fields (semantic rules). For example, such errors occur in the case where the VAT amount does not match the VAT rate or required fields are missing.
- Content errors: These are traditional errors involving incorrect or missing obligatory invoice elements. On the one hand, such content errors may also trigger business rule errors and, on the other hand, content errors can occur even if syntax and business rules are technically correct. Errors falling under this last category are not always detectable by means of automated validation.
From the viewpoint of the Federal Ministry, e-invoices must be checked for the above-mentioned errors as part of a suitable validation process. The validation report should be retained as evidence. From a practical perspective, the validation should be considered for both, incoming and outgoing invoices. Without validation, companies risk losing input VAT deduction on incoming invoices or having outgoing invoices rejected by the customer, leading to invoice corrections and payment delays.
Ideally, companies should choose a validation solution that covers all error types. While technical validation cannot fully replace manual checks of the mandatory invoice details, it can certainly support them effectively. However, the mere existence of a validation application is not sufficient. Rather, it must comply with the duty of care of a prudent businessman. Only if this criterion is met, the Federal Ministry of Finance grants protection of good faith and the company will not face a risk of losing input VAT deduction. To achieve this, the validation application used shall be tested and, ideally, also certified for verification purposes (see also our Validation Analysis).
3 Obligatory Invoice Elements
Obligatory invoice elements are also addressed elsewhere in the letter. The VAT-relevant information under Sections 14 and 14a of the German VAT Act are part of the core data model of the EN 16931 standard. Common practices such as referencing delivery notes to include invoice elements are no longer permitted in e-invoices. The technical format requires, for example, that the delivery date be inserted in a specific field. Combining multiple documents in order to fulfill the mandatory invoice requirements is only allowed for other invoices (i.e. invoices which are not e-invoices according to the current definition).
A further key practical clarification concerns the following: Changes in the scope or extent of a supply are not treated as mere changes to the taxable amount. The latter does not require any correction of invoices. However, if the scope of supplies changes, a corrected (e-)invoice must be issued. The Federal Ministry of Finance’s letter cites the example of significant changes to measurement data, which are common in the construction sector. In the past, (handwritten) changes to an invoice were often made by builders, architects and construction companies without issuing a corrected invoice. This is no longer allowed. In such cases, a corrected (e-)invoice must be issued and archived.
Contact:
Certified Tax Consultant, Master of Science (M.Sc.)
(Business administration)
Phone: +49 89 217501278
E-Mail: katharina.artinger@kmlz.de
As per: 17.10.2025
