Germany is introducing significant changes to its tax and invoicing framework as part of a broader strategy to accelerate digitalization. The country is also encouraging business investment and strengthening its economic competitiveness. 

Key changes in Germany 

One of the most significant developments for companies operating in the German market is the expansion of mandatory electronic invoicing between businesses (B2B). The new requirements will begin to apply on January 1, 2027. 

At the same time, the German government is implementing tax incentives designed to stimulate investment, innovation, and technological modernization. 

New e-invoicing requirements from 2027 

Germany began the gradual introduction of mandatory e-invoicing for domestic business-to-business transactions in January 2025. 

Since then, companies established in the country have generally been required to be able to receive structured electronic invoices, while transitional provisions allow them to continue issuing invoices in other formats for a limited period. 

The next milestone will come on January 1, 2027. From this date, companies whose turnover exceeded €800,000 in 2026 will generally be required to issue structured electronic invoices for domestic B2B transactions subject to this obligation. 

For companies with turnover at or below this threshold, the transitional period allowing invoices to be issued in other permitted formats will continue until the end of 2027. 

From January 1, 2028, the obligation to issue structured electronic invoices will generally extend to domestic B2B transactions, subject to the exceptions provided for under the regulations. 

What qualifies as an electronic invoice? 

Under Germany's new framework, an electronic invoice must be issued, transmitted, and received in a structured electronic format that enables automated processing. 

The system is based on the European standard EN 16931, which facilitates interoperability between different invoicing and accounting solutions. 

Recognized formats include XRechnung and compatible versions of ZUGFeRD, which allow structured information to be exchanged between companies' systems. 

It is important to note that traditional PDF invoices, even when sent electronically, are generally not considered structured electronic invoices for the purposes of the new requirements. 

This distinction is particularly relevant for companies that still rely on manual procedures or invoicing processes based on this type of digital file. 

New tax incentives to boost investment 

Alongside the expansion of e-invoicing, Germany has approved measures designed to encourage business investment and strengthen the country's attractiveness to international companies. 

One of the main initiatives is the so-called Investment Booster. This is an accelerated depreciation scheme for certain movable fixed assets acquired or manufactured between July 1, 2025, and December 31, 2027. 

The measure allows declining-balance depreciation of up to 30% per year, subject to the legally established limits and conditions. 

The incentive aims to stimulate investment in machinery, equipment, and other productive assets, allowing companies to deduct a greater proportion of their investment costs during the first few years. 

Germany has also introduced additional support measures for research and development, including an increase in the maximum assessment base for the R&D tax incentive from €10 million to €12 million, effective from 2026. 

Outlook for 2028: corporate income tax reduction 

Germany's tax strategy also includes a gradual reduction in the corporate income tax rate. 

Under the approved measures, the corporate income tax rate will be reduced from 15% to 10% between 2028 and 2032, through annual reductions of one percentage point. 

Although these reductions will not begin to apply until 2028, they represent an important development for companies planning medium- and long-term investments in Germany. 

For multinational groups, the combination of investment incentives and future tax reductions may influence financial forecasts, investment decisions, and tax planning. 

What are the implications for international companies? 

Multinational companies with a presence in Germany should assess the impact of the new e-invoicing requirements and determine whether their current systems and procedures are ready to meet the expected standards. 

Key considerations include: 

• Determining which German entities will be required to issue structured electronic invoices from January 1, 2027. 

• Reviewing ERP, accounting, and invoicing systems to ensure compatibility with formats based on the EN 16931 standard. 

• Assessing whether invoicing validation, processing, and archiving procedures need to be adapted. 

• Identifying investments that may qualify for accelerated depreciation before the end of 2027. 

• Analyzing the potential impact of future corporate income tax reductions on financial planning and investment strategies. 

The expansion of mandatory e-invoicing, together with tax incentives for investment, reflects Germany's commitment to a more digitalized and competitive business environment. 

For international groups, anticipating these changes will be essential not only to ensure compliance with the new requirements but also to optimize financial processes and take advantage of the opportunities created by the evolving regulatory framework. 

Auxadi's international financial management services enable more than 1,700 multinational groups and investment funds to secure their operations. Contact Auxadi's experts for support with your international expansion into Germany or any of the more than 50 countries in which the firm operates. 

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