E-Invoicing for Tradespeople in Germany: Rules and Practice (2026)

Trade and construction businesses in Germany have had to be able to receive e-invoices since 1 January 2025. Invoices to other German businesses must be e-invoices from 1 January 2027 if 2026 total turnover exceeded €800,000, otherwise from 1 January 2028. This includes progress invoices and reverse-charge construction work under § 13b UStG. Private customers are exempt.

Last reviewed: September 2026. This article is general information, not tax advice.

Which invoices in the trades have to be e-invoices?

Whether you need an e-invoice depends on the customer, not on your trade. The obligation under § 14 UStG applies when your business and the customer are both established in Germany and the work is done for the customer's business. It also covers self-billed invoices (Gutschriften), reverse-charge supplies under § 13b UStG and invoices where only part of the work is taxable.

An e-invoice (E-Rechnung) is an invoice in a structured format that complies with EN 16931, such as XRechnung or ZUGFeRD from version 2.0.1, excluding the profiles MINIMUM and BASIC WL. A PDF exported from your trade software is not an e-invoice. German law calls it an "other invoice" (sonstige Rechnung).

If you are unsure whether a client is acting as a business, ask for their VAT ID. The tax authorities will not object to a missing e-invoice if you could not have recognised this with the care of a prudent businessperson. Tradespeople who use the small business scheme (Kleinunternehmer) are permanently exempt from issuing e-invoices under § 34a UStDV. Our article on e-invoicing for freelancers and small businesses covers the details.

When do trade businesses have to switch?

The transition rules in § 27 (38) UStG depend on two dates: when the work is performed and when the invoice is issued.

A paper or PDF invoice for work performed in 2026 must be issued by 31 December 2026. If you only invoice December work in January 2027, issue an e-invoice to be on the safe side.

The threshold refers to total turnover (Gesamtumsatz) as defined in § 19 (2) UStG. A business with €1.2 million total turnover in 2026 must issue e-invoices to business clients for work performed from 1 January 2027. A business with €450,000 may still use paper invoices in 2027, or PDFs with consent. From 2028 the mandate applies to both. The full timeline is in our guide to Germany's e-invoicing mandate, and related articles are collected in the e-invoicing mandate category.

Progress, partial final and final invoices in XRechnung

Older guides claim there is no separate type for progress invoices and that you must use code 380. That is wrong. The XRechnung business rule BR-DE-17 lists dedicated codes for construction invoices. It is a "should" rule, so other codes produce a warning rather than an error.

For VAT purposes, progress invoices are invoices for payments on account under § 14 (5) UStG. The BMF letter of 15 October 2025 expressly applies the e-invoice requirements to them.

Final invoice: deducting progress payments correctly

A final invoice must deduct the payments on account received and the VAT on them, if invoices were issued for those payments (§ 14 (5) sentence 2 UStG). In XRechnung you reference each progress invoice in BG-3 (BT-25 invoice number, BT-26 invoice date). The amount already paid goes into BT-113 and the remaining balance into BT-115. Rule BR-CO-16 checks the arithmetic: BT-115 = BT-112 − BT-113 + BT-114.

Example: a contract for €50,000 net with two progress invoices of €20,000 net each plus €3,800 VAT, so €23,800 gross each.

The deducted net payments (€40,000) and the VAT on them (€7,600) should also be traceable, for example through the BG-3 references and a breakdown in the invoice note BT-22. How your software handles this is best agreed with your tax adviser. For single invoices, our xrechnung generator works in the browser, and our step-by-step guide to creating an XRechnung walks through each field.

Reverse charge for construction services under § 13b UStG

If you provide construction services to a business that itself regularly provides construction services, that client owes the VAT. This is presumed when its tax office has issued a valid certificate, limited to a maximum of three years. According to the BMF, the e-invoicing mandate covers these supplies too when both businesses are established in Germany.

The invoice shows no VAT and, under § 14a (5) UStG, must state "Steuerschuldnerschaft des Leistungsempfängers" (reverse charge). In XRechnung you set VAT category code AE in BT-151 and BT-118, a rate of 0 % and the statement as text in BT-120. The business rules for category AE also require identifiers for both parties, such as the client's VAT ID in BT-48. If the matching VAT breakdown is missing, the validator reports BR-AE-1. The small-amount rule does not apply to § 13b supplies (§ 33 sentence 3 UStDV).

Private customers: no e-invoice, but an invoicing obligation

There is no e-invoicing obligation towards private customers, and you may only send them an e-invoice with their consent. For taxable work and materials or other services connected with a property, however, § 14 (2) UStG (opens in a new tab) requires an invoice within six months, including to private individuals. This applies whether or not the customer owns the property. The invoice must point out the customer's retention obligation, because private customers must keep such invoices for two years.

Changed measurements, variations and cash discounts

The BMF letter of 15 October 2025 (opens in a new tab) (German) distinguishes two cases. If only the taxable amount goes down, for example through a cash discount (Skonto) or a reduction for defects that does not change the work invoiced, no invoice correction is needed. If the scope of the work changes, for example through relevant changes in the measured quantities (Aufmaß), a correction is generally required, at least of the description of the work.

A correction of an e-invoice must itself be an e-invoice with a suitable type code, such as 384 with a reference to the original invoice in BT-25. An informal e-mail with the corrected quantities is not enough. With prior agreement, the client can also correct the invoice by self-billing, and must then clearly reference the original invoice. Invoice variations (Nachträge) separately and reference the contract (BT-12) and the purchase order (BT-13).

Buying materials: receiving and checking supplier invoices

Since 1 January 2025 you must accept e-invoices from wholesalers and subcontractors. An existing e-mail inbox is sufficient, and you have no right to demand a paper invoice. With a ZUGFeRD invoice, the XML part is authoritative. If the PDF differs, the XML prevails, and input VAT can only be deducted on the basis of the XML.

Our e-invoice validator displays incoming XML invoices in UBL and CII in readable form and checks them against the KoSIT rules. For a ZUGFeRD invoice, first extract the XML from the PDF and then check it in the viewer. According to the BMF, you should keep the validation report as evidence. Checking the content remains your job, and the invoice checker helps with the mandatory details under § 14 UStG. DIY store receipts up to €250 including VAT are small-amount invoices and may stay on paper. Keep incoming invoices for eight years, e-invoices in their original XML. More on this in our article on e-invoice archiving under GoBD.

Public contracts: Leitweg-ID, attachments and GAEB

German federal authorities have required e-invoices since 27 November 2020. Since 19 September 2025, the OZG-RE has been the only federal invoice-receipt platform. The contracting authority's Leitweg-ID (buyer reference) goes into BT-10; if it is missing, the validator reports BR-DE-15. Federal states and municipalities run their own portals with their own rules.

Measurement sheets, photos and timesheets must be embedded in the invoice file rather than sent as separate e-mail attachments. According to the federal e-invoicing FAQ (opens in a new tab), png, pdf, jpg, xlsx, ods and csv files are allowed, up to 200 attachments, up to 10 MB by e-mail and 11 MB via the web form. Larger files go through the "Große Anlagen" function with up to 200 MB. XML attachments such as GAEB files (the German construction data exchange format) are only allowed with the Extension XRechnung, which also supports sub-invoice lines. Our article on XRechnung attachments explains how Base64 embedding works.

What to look for in trade software

Many programs for trade and construction businesses export XRechnung or ZUGFeRD. Before choosing one, check for:

• type codes 875, 876 and 877 for progress, partial final and final invoices,
• VAT category AE for § 13b invoices,
• embedded attachments and, for public contracts, the Extension XRechnung,
• import of incoming e-invoices and export of XML files for your archive.

Whether you use XRechnung or ZUGFeRD depends on the customer. ZUGFeRD stays readable as a PDF, while XRechnung is pure XML and the standard for public authorities. The comparison XRechnung vs. ZUGFeRD sets out the differences.

Checklist for trade businesses

1. Set up a fixed e-mail address for incoming invoices and open a test XML file.
2. Work out your 2026 total turnover to know which rules apply in 2027.
3. Sort your customers: business clients, landlords, private customers, authorities.
4. Issue progress invoices with code 875 and final invoices with code 877.
5. Configure category AE and the reverse-charge statement for § 13b work.
6. Correct changed measurements by e-invoice with a reference to the original.
7. Embed attachments and never edit ZUGFeRD PDFs with PDF tools.
8. Archive XML files and validation reports unaltered for eight years.