The e-invoicing obligation for small businesses has been causing uncertainty since the Growth Opportunities Act. Must entrepreneurs under § 19 UStG also receive and send electronic invoices? The clear answer: Yes – but with important transition periods and exceptions. In this comprehensive guide, you will learn everything you need to know as a small business about the e-invoicing mandate – including practical tips and a timeline for the transition.
The key facts at a glance
- Receiving obligation from January 1, 2025: Every entrepreneur (including small businesses) must be able to receive and process e-invoices in B2B transactions.
- Sending obligation phased: Transition periods until the end of 2027 or end of 2028 – depending on prior-year revenue.
- Formats: ZUGFeRD and XRechnung are the common formats in Germany.
- Exceptions: Small invoices under 250 € and pure B2C transactions are exempt from the e-invoicing mandate.
- Action needed now: Even if you as a small business do not yet have to actively send, you should prepare early.
What does the e-invoicing mandate mean for small businesses?
Since the Growth Opportunities Act came into effect on March 28, 2024, new rules apply for electronic invoicing in Germany. The law stipulates that the B2B sector (transactions between companies) must gradually transition to structured electronic invoices.
Many small businesses under § 19 UStG initially assumed they were exempt from this obligation. However, this is a widespread misconception. The legislature does not distinguish between standard-taxed companies and small businesses regarding the e-invoicing mandate. The relevant provision in § 14 UStG applies to all entrepreneurs within the meaning of the VAT Act – and that includes small businesses.
Good to know: Small businesses are and remain entrepreneurs within the meaning of the UStG. The small business regulation only exempts from VAT collection, not from the obligations of proper invoicing. Therefore, the e-invoicing mandate also applies to this group.
What exactly changes?
For small businesses, the new legislation brings the following specific changes:
1. Receiving e-invoices (from January 1, 2025): If you as a small business purchase goods or services from other companies, you must be able to receive and archive their e-invoices. A simple email inbox is fundamentally sufficient for receiving – however, the invoice must be in a structured format (e.g., ZUGFeRD or XRechnung) and stored in an audit-proof manner.
2. Sending e-invoices (phased from 2027/2028): If you as a small business issue invoices to other companies (B2B), you will eventually have to issue them as e-invoices in structured format. Generous transition periods apply here, which we explain in the next section.
3. Archiving: Both received and sent e-invoices must be archived in a GoBD-compliant manner – meaning: unalterable, complete, machine-readable, and accessible throughout the entire retention period of 10 years. A suitable GoBD-compliant archiving system is therefore also recommended for small businesses.
Transition periods and timeline: When does what apply?
The legislature has provided a phased model to give companies – especially smaller businesses – sufficient time for the transition. Here is the complete timeline:
| Period | What applies? | For whom? |
|---|---|---|
| From January 1, 2025 | Obligation to receive e-invoices in the B2B sector | All entrepreneurs, including small businesses |
| January 1, 2025 – December 31, 2026 | Paper invoices and other electronic formats (e.g., PDF) may continue to be sent | All entrepreneurs |
| January 1, 2027 – December 31, 2027 | Paper invoices and other formats only for companies with prior-year revenue ≤ 800,000 €; larger companies must send e-invoices | Companies > 800,000 € revenue: e-invoicing mandate for sending |
| From January 1, 2028 | Full e-invoicing mandate for all B2B invoices – sending and receiving | All entrepreneurs, including small businesses |
Practical tip: Since small businesses typically have revenue well below 800,000 € per year, you benefit from the longest transition period. Until the end of 2027, you may continue to send paper or PDF invoices. From January 1, 2028, you too must issue e-invoices in structured format for B2B transactions.
What exceptions apply to small businesses?
Even though the e-invoicing mandate generally applies to all entrepreneurs, there are some important exceptions that are particularly relevant for small businesses:
1. Small invoices under 250 €
Invoices with a total amount of no more than 250 € gross (so-called small invoices under § 33 UStDV) are exempt from the e-invoicing mandate. These may continue to be issued in paper form or as simple PDFs – even after 2028.
For many small businesses who frequently invoice smaller amounts, this is a significant relief. Note, however, that the 250 € threshold refers to the total amount including VAT. Since small businesses do not charge VAT, the invoice amount is identical to the net amount.
2. B2C transactions (invoices to private individuals)
The e-invoicing mandate applies exclusively to the B2B sector, i.e., invoices between companies. If you as a small business sell exclusively to private individuals (B2C), you are not affected by the sending obligation. You do not need to create e-invoices in this case.
3. Tax-exempt services under § 4 Nos. 8 to 29 UStG
Certain tax-exempt transactions, such as insurance services, real estate sales, or educational services, are also exempt from the e-invoicing mandate. This exception affects small businesses only in individual cases but should be mentioned for completeness.
4. Travel tickets and fare receipts
Travel tickets within the meaning of § 34 UStDV are also exempt from the e-invoicing mandate. For car dealers and automotive businesses, this exception plays no practical role.
Special case: Small businesses in the automotive trade
For car dealers and automotive businesses operating as small businesses, particular challenges arise. Used car sales to companies (e.g., other dealers, fleet operators) fall under the B2B e-invoicing mandate. At the same time, many used vehicles are subject to margin taxation, which requires special care when invoicing.
Tip for automotive small businesses: Use an invoicing software that correctly handles both the small business regulation and the e-invoice requirements. This way, you avoid formal errors that could lead to objections during a tax audit.
Practical steps: How to prepare as a small business
Even though the full sending obligation for small businesses does not take effect until 2028, you should act now. Here is your checklist:
Step 1: Set up an email inbox for e-invoices
Make sure you have an email inbox to which your business partners can send e-invoices. Ideally, set up a dedicated address, e.g., invoice@yourcompany.com. This helps you maintain an overview and prevents e-invoices from getting lost in the general inbox.
Step 2: Learn to read and understand e-invoices
Familiarize yourself with the formats XRechnung and ZUGFeRD. An XRechnung is a pure XML file that is not human-readable without special software. ZUGFeRD combines a PDF file with embedded XML data – you can read the PDF normally while the structured data is processed automatically. Further details on the differences can be found in our article on ZUGFeRD and XRechnung.
Step 3: Ensure GoBD-compliant archiving
E-invoices must be retained for 10 years – in the original format. A printout on paper is not sufficient. You need a system that stores the invoices in an unalterable and machine-readable manner. Learn about suitable solutions for GoBD-compliant archiving.
Step 4: Evaluate software for e-invoice sending
By 2028 at the latest, you must send e-invoices in the B2B sector. Evaluate now which software solution suits your business. Various options are available – from free tools to professional industry solutions.
Step 5: Inform your business partners
Let your suppliers and business partners know that you can receive e-invoices and provide the appropriate email address. This facilitates the transition for both sides.
Software options for small businesses
When it comes to e-invoicing, small businesses have various software solutions available:
| Solution | Cost | Feature scope | Suitable for |
|---|---|---|---|
| Free online validators | Free | Only verification/display of e-invoices | Occasional receipt of individual e-invoices |
| Simple accounting software (e.g., SevDesk, lexoffice) | From approx. 10 €/month | Create, send, receive, archive | Solopreneurs and freelancers |
| Industry-specific solutions (e.g., AutoPult) | Individual | E-invoice + industry features (e.g., vehicle management, margin taxation) | Car dealers and dealerships |
| ELSTER / Mein Unternehmenskonto | Free | Receiving only (planned) | Basic use for receiving |
How AutoPult also helps small car dealers
As a specialized B2B software for the German automotive trade, AutoPult also offers small businesses in the automotive sector a comprehensive solution:
- Create and send e-invoices: Generate XRechnung and ZUGFeRD directly from the system – correctly formatted and legally compliant.
- Automatic small business regulation: AutoPult automatically accounts for the absence of VAT disclosure pursuant to § 19 UStG.
- GoBD-compliant archiving: All incoming and outgoing invoices are stored in an audit-proof and permanent manner.
- Integrated invoicing software: Use the invoicing software from AutoPult for all billing processes – from quote creation to payment tracking.
- Industry-specific features: Vehicle management, margin taxation, purchasing and sales processes – all in one platform.
Tip: Even if you as a small car dealer only need to meet the sending obligation from 2028, an early switch to a professional solution pays off. This way, you gain experience and avoid stress during the transition. Learn more about the e-invoicing features of AutoPult.
Common mistakes to avoid
When introducing e-invoicing, small businesses frequently make the following mistakes:
Wrong! The e-invoicing mandate applies to all entrepreneurs. Small businesses have been required to receive e-invoices since January 1, 2025.
A simple PDF file is not an e-invoice within the meaning of the law. E-invoices must contain structured, machine-readable data (XML format according to EN 16931).
E-invoices must be archived in the digital original format. A paper printout does not meet GoBD requirements.
Frequently Asked Questions (FAQ)
Are small businesses exempt from the e-invoicing mandate?
No. Small businesses under § 19 UStG are entrepreneurs within the meaning of the VAT Act and are therefore subject to the e-invoicing mandate. Since January 1, 2025, they must be able to receive e-invoices. The sending obligation applies from January 1, 2028 at the latest.
Must I as a small business send e-invoices since 2025?
No, not yet. Until the end of 2027, small businesses (which typically have revenue below 800,000 € per year) may continue to send paper or PDF invoices. From January 1, 2028, sending e-invoices in the B2B sector is then mandatory.
Does the e-invoicing mandate also apply to invoices to private individuals?
No. The e-invoicing mandate applies exclusively to the B2B sector, i.e., invoices between companies. Invoices to private individuals (B2C) can continue to be issued in paper form or as simple PDFs.
What applies to small invoices under 250 €?
Small invoices with a total amount of no more than 250 € gross are exempt from the e-invoicing mandate. These may continue to be issued as paper or PDF invoices even after 2028.
What format must an e-invoice have?
An e-invoice must comply with the European standard EN 16931. In Germany, the formats XRechnung (pure XML file) and ZUGFeRD (from version 2.0.1, PDF with embedded XML) are permitted. More information in our article on ZUGFeRD and XRechnung.
Is an email inbox sufficient for receiving e-invoices?
In principle, yes – a normal email inbox is sufficient for receiving e-invoices. However, you must then archive the received invoices in a GoBD-compliant manner. A simple email inbox generally does not fulfill this archiving obligation.
What happens if I ignore the e-invoicing mandate?
If you cannot receive or send e-invoices from the relevant deadline, you risk your invoices being considered non-compliant. This can lead to problems during a tax audit and in the worst case jeopardize the input tax deduction of your business partners.
Must I as a small business without VAT still issue e-invoices?
Yes, from 2028, small businesses in the B2B sector must also issue e-invoices – even if they do not charge VAT. The e-invoice will then contain the reference to the small business regulation under § 19 UStG, but the format requirements (EN 16931) still apply.
Conclusion: Prepare now instead of stressing later
The e-invoicing obligation for small businesses is not distant future talk – the first step, the receiving obligation, has been in effect since January 1, 2025. Even though the full sending obligation does not take effect until 2028, you should use the remaining time to prepare.
The good news: the transition is less complicated than many think. With the right software – whether a general accounting solution or an industry-specific platform like AutoPult – you will manage the switch smoothly.
- Immediately: Ensure that you can receive e-invoices and archive them in a GoBD-compliant manner.
- By end of 2027: Evaluate a software solution for e-invoice sending and test it in your daily operations.
- From 2028: Issue all B2B invoices as e-invoices in XRechnung or ZUGFeRD format.
Are you a car dealer looking for an industry-specific solution? AutoPult combines e-invoicing, invoicing software, and GoBD archiving in one platform – built specifically for the German car trade. Get started now and be optimally prepared.
