Tax & Law

Growth Opportunities Act

Definition

The Growth Opportunities Act (officially: Gesetz zur Stärkung von Wachstumschancen, Investitionen und Innovation sowie Steuervereinfachung und Steuerfairness) was passed in March 2024 and regulates, among other things, the phased introduction of mandatory electronic invoicing in the B2B sector in Germany. From 2025, all domestic B2B invoices must be issued in a structured format and businesses must be capable of receiving them; transitional exemptions apply on a staggered basis until 2028.

Background & context

The Growth Opportunities Act was passed in March 2024 and is the central legal lever for introducing mandatory electronic invoicing in the domestic B2B sector. It amends in particular the VAT Act, where it defines for the first time the e-invoice as a structured, EN 16931-compliant format. The rollout schedule is staggered to give companies time to adapt: from 1 January 2025, all domestic companies must be able to receive e-invoices. For issuing, a transition phase applies — until the end of 2026, invoices may still be sent as paper or (with the recipient's consent) as PDF; companies with prior-year turnover above €800,000 must issue structured invoices from 2027, all others from 2028. Exempt are, among others, small-amount invoices up to €250 and invoices to consumers. The act thus lays the foundation for a future transaction-based reporting system, as envisaged by the EU initiative 'VAT in the Digital Age' (ViDA).

In practice — a worked example

A medium-sized company with €2m annual turnover plans the transition. Step 1 (by end of 2024): set up an inbound channel and audit-proof archiving for e-invoices, since the receiving obligation applies from 2025. Step 2 (by 2027): switch outgoing invoicing to an EN 16931-compliant format (e.g. ZUGFeRD EN 16931 profile or XRechnung), because with turnover above €800,000 the company must issue structured invoices from 2027. Small-amount invoices up to €250 and B2C invoices it can continue to issue as PDF for now.

Common mistakes

  • The transition periods apply only to issuing — the 2025 receiving obligation has no transition period.
  • The €800,000 turnover threshold determines whether the issuing obligation applies in 2027 or only 2028; it is often overlooked.
  • Sending PDFs remains permissible only with the recipient's consent and only during the transition phase.

Frequently asked questions

What does the Growth Opportunities Act regulate for e-invoices?

It introduces mandatory structured e-invoicing in domestic B2B, defines the e-invoice as an EN 16931-compliant format, and sets a staggered rollout schedule from 2025 to 2028.

When must my company issue e-invoices?

If prior-year turnover exceeds €800,000, from 2027; otherwise from 2028. You must be able to receive from 2025.

Are there exemptions?

Yes, including small-amount invoices up to €250, travel tickets and invoices to consumers (B2C). For these, another form remains permissible.

Related terms

E-InvoiceAn e-invoice in the strict sense is an invoice that is issued and received in a structured, machine-readable format and enables automatic electronic processing. In the German context, particularly following the Growth Opportunities Act, e-invoice explicitly refers to structured formats (XRechnung, ZUGFeRD/Factur-X, Peppol BIS), while pure PDF invoices no longer qualify. Hybrid formats such as ZUGFeRD count as e-invoices because they contain the XML structured data.B2B (Business-to-Business)B2B refers to business relationships and invoicing between two companies. In Germany, the Growth Opportunities Act (2024) introduced a mandatory electronic invoicing obligation for domestic B2B transactions as well. From 2025, businesses must be capable of receiving e-invoices; the obligation to issue them will be phased in until 2028. ZUGFeRD and XRechnung are both permitted formats for B2B.XRechnungXRechnung is the German standard for structured electronic invoices in public sector procurement (B2G). It is based on the European standard EN 16931 and is available in two syntaxes: UBL 2.1 and UN/CEFACT CII. Since 27 November 2020, federal public buyers have been required to accept electronic invoices in XRechnung format, and state and municipal authorities have been progressively included.ZUGFeRDZUGFeRD (Zentraler User Guide des Forums elektronische Rechnung Deutschland) is a hybrid invoice format that combines a human-readable PDF/A-3 file with embedded machine-readable XML data. The format is maintained by the Forum elektronische Rechnung Deutschland (FeRD) and exists in several profiles (MINIMUM, BASIC, EN 16931, EXTENDED). It is technically identical to the European Factur-X standard.Small Business Rule (§ 19 UStG)The small business rule under § 19 UStG exempts businesses with annual turnover below a threshold (since 2025: €25,000 in the previous year and an expected €100,000 in the current year) from charging VAT. Small businesses issue invoices without VAT but are also not entitled to deduct input tax. On electronic invoices, the VAT category code E (exempt) must be used.