Small Business E-Invoicing: What Applies Starting in 2025?

Many small businesses under § 19 UStG assume that the e-invoice mandate does not apply to them. This is a dangerous misconception. The Growth Opportunities Act clearly distinguishes between receiving and sending obligations — and for the receiving obligation, there is no exception for small businesses.

> Quick answer: Small businesses have been required to receive and archive e-invoices since January 1, 2025. The sending obligation takes effect on January 1, 2028 — regardless of revenue. ZUGFeRD is the recommended format because it remains readable as a PDF and does not require an ERP system.

Does the receiving obligation apply to small businesses?

Since January 1, 2025, all companies in Germany must be able to receive e-invoices. This explicitly includes small businesses. The legislature has not provided any revenue threshold or exception here.

What does this mean in practice?

• If a business partner sends you a ZUGFeRD or XRechnung file, you must be able to accept and archive it.
• You may not request that the sender provide a conventional PDF or paper invoice instead.
• The received e-invoice must be archived in a GoBD-compliant manner — i.e., unaltered, machine-readable, for 10 years.

For most small businesses, this means: you need an email inbox for receiving invoices and an audit-proof storage solution. A ZUGFeRD PDF can be opened like a normal PDF — that is one of the advantages of this format.

When does the sending obligation begin for small businesses?

Starting January 1, 2028, small businesses must also send their B2B invoices as e-invoices. The tax rate remains at 0% — but the form of the invoice must meet the technical requirements of EN 16931. More on the deadlines: E-Invoice Mandate 2027.

What must small businesses include in an e-invoice?

A small business e-invoice contains the same mandatory fields as any other EN 16931-compliant invoice, with the following specifics:

• Tax category: Code E (Exempt — tax-exempt) instead of S (Standard)
• Tax rate: 0%
• Exemption reason: Reference to the small business regulation under § 19 UStG (BT-120 or BT-121)
• VAT ID: Not mandatory. The tax number (BT-32) is sufficient.

Sample notice text for the invoice

> "Pursuant to § 19 UStG, no VAT is charged."

This notice is included in the structured XML of the e-invoice as Tax Exemption Reason (BT-120).

What solutions are available for small businesses?

Small businesses typically have neither an ERP system nor accounting software that can generate e-invoices. There are several practical options:

Option 1: Accounting software — Programs like sevDesk, lexoffice, or FastBill offer ZUGFeRD export (from approx. €7–15/month).

Option 2: Convert PDF invoices — You continue creating your invoices with Word or Excel and then convert the PDF with TaxLayer to ZUGFeRD. No new software needed, the first 2 conversions per month are free.

Option 3: XRechnung Generator — For simple invoices, you can use the XRechnung Generator without registration.

More options compared: Create E-Invoice: 5 Methods Compared.

Why is ZUGFeRD the best choice for small businesses?

For small businesses, ZUGFeRD (not XRechnung) is almost always the right format:

1. Human-readable: Customers can open the invoice as a normal PDF
2. Easy to send: By email as an attachment, just like before
3. No Leitweg-ID needed: Only relevant for XRechnung to government agencies
4. DATEV-compatible: Tax advisors can import ZUGFeRD directly
5. Archive-friendly: PDF/A-3 is suitable for long-term archiving and GoBD-compliant

Checklist: E-invoicing for small businesses

• Email inbox set up for receiving e-invoices
• Archiving solution for incoming e-invoices (GoBD-compliant, 10 years)
• Tax number included in all outgoing invoices
• Reference to § 19 UStG in all invoices
• Tool chosen for creating ZUGFeRD invoices
• Test invoice created and checked with the Validator

TaxLayer converts your existing PDF invoices into validated ZUGFeRD files — without needing to learn a new invoicing program. The small business regulation is automatically reflected correctly: tax category E, tax rate 0%, exemption notice per § 19 UStG. The first 2 conversions per month are free — no credit card, no subscription.