E-Invoice Mandate for Small Businesses: What Really Applies

The e-invoice mandate causes uncertainty for many small business owners (Kleinunternehmer). The good news first: as a small business under §19 UStG, you benefit from relief. Still, you are not entirely off the hook. This guide clearly explains what you must be able to receive, what you may issue – and what you should do in practice.

What exactly is an e-invoice?

In the legal sense, an e-invoice is not simply a PDF that you send by email. It means an invoice in a structured electronic format that can be read and processed by machines. The decisive standard is the European norm EN 16931.

Two formats are common in Germany:

• XRechnung – a pure XML format without a visible layout.
• ZUGFeRD – a hybrid format: a PDF/A-3 with an embedded structured XML file. You see a normal PDF, but machine-readable data sits in the background. ZUGFeRD profiles from version 2.x onward comply with EN 16931.

A classic PDF or a scanned paper invoice, by contrast, does not count as an e-invoice – it is merely an "other invoice" in electronic format. The distinction sounds technical but is decisive: only structured data can be read out automatically and pulled into bookkeeping. That is precisely the aim of the reform – less manual retyping, fewer errors, and, in the long run, easier review by the tax office.

Receiving: mandatory since 01.01.2025

There is no exception for small businesses here: since 01.01.2025, every domestic business must be able to receive structured B2B e-invoices. This expressly includes small businesses under §19 UStG.

The background: from 2025, a business partner may send you an XRechnung or ZUGFeRD invoice without asking for permission first. While transition periods still run for issuing, receiving is already mandatory with no grace period. If you cannot accept a correctly delivered e-invoice, any resulting disadvantages fall on you – for example if you insist on an invoice in your preferred format even though the electronic form is already permitted.

The technical hurdle is pleasantly low:

• In most cases, an email address to which the supplier sends the e-invoice is sufficient.
• You should be able to open and read the file. For ZUGFeRD a normal PDF reader suffices for visual inspection; you can read XRechnungen with a free viewer.
• What matters is audit-proof archiving (more on this below).

So you do not need to buy expensive software. A working email address and a program to display the files are enough to meet the receiving obligation. In practice it is wise to set up a dedicated invoice address (for example rechnung@your-domain.de) that you check regularly and list on your orders, contracts and imprint. That way e-invoices do not land in a private inbox or the spam folder, but in one place where you can file them in an orderly fashion.

Issuing: no obligation for §19 sales

When it comes to issuing, the key relief for small businesses applies: for your own tax-free sales under §19 UStG, you are exempt from the obligation to issue an e-invoice. You may continue to write paper or PDF invoices.

That does not mean you are not allowed to: you can issue e-invoices voluntarily. If you want to send an e-invoice, then – as with any electronic format – the recipient's consent is required.

For all other businesses (non-small-businesses), staggered transition periods apply:

• Until 31.12.2026, paper and PDF invoices remain permitted in B2B, provided the recipient consents.
• For businesses with a prior-year turnover of up to 800,000 €, this deadline extends until 31.12.2027.
• From 01.01.2028, issuing structured e-invoices in B2B becomes fully mandatory.

Since small businesses are exempt from the issuing obligation for their §19 sales, the 2028 deadline does not directly affect you in this activity. The receiving obligation, however, remains unaffected.

Important for planning: this exemption hangs on the §19 status. If you grow and exceed the small-business thresholds or voluntarily switch to standard taxation, you will then show VAT – and the same issuing deadlines apply to you as to any other business. It is therefore worth knowing early how you could switch to e-invoices if needed, even if you are not required to today.

Good to know: B2C invoices to private customers are generally exempt from the e-invoice mandate. The rules only concern business-to-business (B2B) transactions.

What your invoice as a small business must include

Regardless of format, the content requirements apply to you. As a small business you show no VAT and add the mandatory note:

"Gemäß § 19 UStG wird keine Umsatzsteuer berechnet." (No VAT is charged in accordance with §19 UStG.)

You have no input-tax deduction. Apart from that, you need the usual mandatory fields under §14 UStG: full name and address of you and the recipient, your tax number or VAT ID, the issue date, a sequential unique invoice number, the quantity and type of service, and the service date. For invoices up to 250 € gross, the simplified small-amount invoice under §33 UStDV with reduced mandatory fields is sufficient.

Incidentally, since 2025 new turnover thresholds apply for small-business status: the prior-year turnover may not exceed 25,000 € and the turnover in the current year may not exceed 100,000 €. If you exceed the current-year limit during the year, the status ends from that sale onward – so keep an eye on your figures, especially as your business grows.

Worked example: a web designer's invoice

Lisa is a small business owner and designs a website for a GmbH. Fee: 800 €. Since she charges no VAT under §19 UStG, the invoice amount is simply 800,00 € – with no separately shown VAT. The invoice carries the mandatory §19 UStG note.

For comparison: if Lisa had to show 19 % VAT as a standard-taxed business, a net amount of 800,00 € would carry an additional tax amount of 152,00 € – the invoice would then total 952,00 € gross. As a small business this surcharge does not apply; her client pays only the 800,00 €, but also cannot deduct any input tax from it.

The GmbH asks for an e-invoice because it is digitizing its bookkeeping. Lisa does not have to do this, but may: using our invoice generator she creates a correct §19 invoice as a PDF and – with the GmbH's consent – in the requested format. This keeps her flexible without having to invest in expensive software.

Archiving: comply with GoBD

Whether you receive e-invoices or voluntarily issue them – they must be stored unalterably in accordance with the GoBD. For a ZUGFeRD invoice, the structured XML part is the authoritative original and must be preserved; it is not enough to file just a printout or to save the PDF separately.

The retention period for invoices has been 8 years since 2025 (previously 10 years). So file incoming e-invoices right away in an organized, secure folder or in accounting software. A clear structure by year and month plus a regular backup is sensible, so the files stay readable and unchanged over the entire period.

Your checklist as a small business

1. Ensure receiving: Set up an email address that you check regularly and share with business partners.
2. Have a viewer ready: Make sure you can open and read XRechnung and ZUGFeRD files.
3. Archive audit-proof: Store the original (including the XML for ZUGFeRD) unalterably for 8 years.
4. Write your own invoices: For §19 sales, PDF or paper still suffices – with the correct §19 note and all mandatory fields under §14 UStG.
5. Go digital voluntarily: If you want to switch early, issue e-invoices only with the recipient's consent.
6. Keep growth in view: Check your turnover against the 25,000 € (prior year) and 100,000 € (current year) limits so you spot a status change in time.

With a simple email address and a tidy filing system, you are on the safe side as a small business – the biggest practical task is receiving, not issuing.