Article from
E-Invoice, XRechnung, ZUGFeRD.
With the XRechnung, the public administration in Germany has established a new standard for electronic invoices (eInvoices). This became necessary after the European Union, as part of its digital initiative, mandated all member states through Directive 2014/55/EU to ensure the receipt of electronic invoice data by public administrations across Europe. Here, we explain the difference between E-Invoice, XRechnung, and ZUGFeRD. MOCO generates the XRechnung format.
Digital Europe
Across Europe, the trend is towards digitalisation. A key driver of this development is the so-called 'Digital Agenda for Europe 2020' – a programme aimed at preparing the European Union for digital competition on an international scale.
The digital agenda focuses on improving consumer and business access to digital goods and services, creating the right conditions for the development of digital networks and innovative services, and better exploiting growth potentials within a digital economy.
The cost-saving potential of the E-Invoice is expected to be enormous. Additionally, Italy, as a pioneer, anticipates better control over rampant VAT fraud through real-time tax reporting.
The cost-saving potential of the E-Invoice is expected to be enormous. Additionally, Italy, as a pioneer, anticipates better control over rampant VAT fraud through real-time tax reporting.
The E-Invoice as Part of the Solution
The E-Invoice presents invoice content not on paper or as an image file like a PDF, but in a structured, machine-readable XML dataset. This ensures that information issued in this form by the invoicer can be electronically transmitted, received, processed without interruption, and automated for payment.
X-Rechnung & ZUGFeRD
The European standardisation body (CEN) published the EU standard EN 16931-1:2017, which was implemented in Germany as a 'Core Invoice Usage Specification' (CIUS) – also known as XRechnung.
XRechnung Mandatory for Federal Clients in Germany
Since the end of 2020, invoices in Germany to federal clients over 1000 EUR must be submitted digitally in the new eInvoice format XRechnung via the federal 'Central Invoice Entry Platform' (ZRE). Either directly or through a portal. Otherwise, they will be rejected and not paid.
Invoicers have various options for transmission. One option is a PDF including structured data. The Forum for Electronic Invoicing Germany (FeRD) developed a comprehensive format for this purpose. This hybrid format is therefore called ZUGFeRD.
(English image not yet available)Challenges for Municipalities, Public Enterprises, and Other Recipients at State and Local Levels
Regulations at the state level differ significantly
In practice, 'uniform' electronic invoicing to clients in federal, state, and municipal governments in Germany is anything but 'simple'. The increased activism of public administration was asynchronous. While the federal government has completed its tasks regarding 'E-Invoice', progress at the state and municipal levels is extremely varied – due to the federal nature of the matter.
At the state level, there is (as yet) virtually no obligation for eInvoice dispatch to the administration. The sheer number of different detailed requirements, portals, transmission methods, and thresholds makes eInvoicing to public administration and public enterprises very complicated. Especially when acting as a supplier or service provider to multiple invoice recipients in different states, municipalities, or regions.
Differences exist not only at the state and municipal levels. Within these areas, there are often still a multitude of uncertainties.
Therefore, it must be clarified with each client individually how invoicing should be done and what information must be transmitted with the XRechnung. What is always needed is an identification number of the client – usually, this is the Leitweg-ID. A supplier number and an order number may also be required.
In practice, 'uniform' electronic invoicing to clients in federal, state, and municipal governments in Germany is anything but 'simple'. The increased activism of public administration was asynchronous. While the federal government has completed its tasks regarding 'E-Invoice', progress at the state and municipal levels is extremely varied – due to the federal nature of the matter.
At the state level, there is (as yet) virtually no obligation for eInvoice dispatch to the administration. The sheer number of different detailed requirements, portals, transmission methods, and thresholds makes eInvoicing to public administration and public enterprises very complicated. Especially when acting as a supplier or service provider to multiple invoice recipients in different states, municipalities, or regions.
Differences exist not only at the state and municipal levels. Within these areas, there are often still a multitude of uncertainties.
Therefore, it must be clarified with each client individually how invoicing should be done and what information must be transmitted with the XRechnung. What is always needed is an identification number of the client – usually, this is the Leitweg-ID. A supplier number and an order number may also be required.
