As of 2025, German businesses that issue invoices to other businesses have to do so electronically. The question, however, is in what format? There are two well-known options: the XRechnung and the ZUGFeRD invoice.

In this article, we explain what XRechnung and ZUGFeRD invoices are. We explore how the formats differ, including their legal compliance, technical requirements, and practical handling.

What’s in this article?

• What are electronic invoices?
  
• What is an XRechnung invoice?
  
• What is a ZUGFeRD invoice?
  
• What is the difference between an XRechnung and a ZUGFeRD invoice?
  

What are electronic invoices?

Electronic invoices, or e-invoices, are digital documents that contain invoice data in a structured, machine-readable format. Unlike traditional paper invoices or unstructured PDFs, e-invoices enable automatic processing by accounting and enterprise resource planning (ERP) systems. Common formats include XML-based standards such as XRechnung or ZUGFeRD, which meet the requirements of digital invoice management. Electronic invoices must comply with the legal requirements of the European Union (EU) standard EN 16931.

The introduction of e-invoicing is part of a comprehensive shift towards the digitalization of the economy. E-invoicing is meant to optimize workflows, reduce sources of errors in manual data entry, and reduce costs. Another key driver behind e-invoicing is the EU Directive 2014/55/EU introduced in 2014, which made e-invoicing mandatory for public contracts in the European Union. The directive was introduced in hopes that e-invoicing would make administration more efficient and facilitate cross-border cooperation within the EU. The directive also stated that starting in November 2020, all contracting authorities in Germany must receive and process invoices in an electronic format.

As of January 1, 2025, e-invoicing is not only relevant for businesses that issue invoices to public administrations and federal authorities (i.e., business-to-government or B2G businesses). Due to the Federal Council’s Growth Opportunities Act, which passed in March 2024, businesses that sell or purchase goods or services from other businesses (i.e., business-to-business or B2B companies) must issue invoices electronically as of 2025. The only exceptions are small-scale entrepreneurs: they can continue to send invoices as paper documents or PDF files. However, they must be able to receive and process incoming electronic invoices. The Annual Tax Act 2024 defined this regulation for small-scale entrepreneurs. As of 2025, you can find detailed information in our article on the small-scale entrepreneur rule.

The specific format businesses use for e-invoices is up to the businesses themselves. The most common options in Germany are the XRechnung and the ZUGFeRD invoice.

What is an XRechnung invoice?

The XRechnung was approved by the Coordination Office for IT Standards (KoSIT), which, in Germany, is responsible for the development and operation of information technology (IT) standards for data exchange in public administration. Although the XRechnung mirrors a traditional invoice in terms of content and legal compliance, it differs fundamentally in its format: the XRechnung is based on an XML data format. Instead of a readable document, the XRechnung consists of a data set in the form of lines of code. All invoice data has a predetermined space in this structured format and can therefore be fully and automatically read and processed by digital systems.

What is a ZUGFeRD invoice?

The Forum elektronische Rechnung Deutschland (FeRD) developed the ZUGFeRD invoice in 2014. This explains the invoice format’s full name “Central User Guide of the Forum for Electronic Invoicing Germany,” which is abbreviated to “ZUGFeRD.” A ZUGFeRD invoice is a hybrid invoice format that combines two elements in one document. Like the XRechnung, it contains an XML data set, but it also contains a PDF/A-3 document that looks like a conventional invoice. This means that both machines and humans can read the ZUGFeRD invoice.

What is the difference between an XRechnung and a ZUGFeRD invoice?

B2B businesses in particular should take a close look at the differences between XRechnung and ZUGFeRD invoices to be able to decide which invoice format is best for them. Below is an overview of the most important differences.

Legal compliance

Both the XRechnung and the ZUGFeRD invoice are legally compliant with the relevant European directives and standards. ZUGFeRD, as of version 2.0, adheres to the international standard for invoices, the Cross-Industry Invoice (CII) of the United Nations Centre for Trade Facilitation and Electronic Business (UN/CEFACT). This standard for electronic invoices, which enables the structured exchange of data, is also the basis of the XRechnung. In terms of legal conformity, there is therefore no difference between the XRechnung and ZUGFeRD invoice.

Target group

The target groups of the XRechnung and ZUGFeRD invoices differ due to their respective focuses and potential uses. The XRechnung was originally for invoicing with public clients. It is therefore particularly suitable for businesses that exclusively maintain business relations with public authorities and institutions.

In contrast, the ZUGFeRD format appeals to a much broader target group. It is suitable for use in both the public sector and the B2B sector. Theoretically, it is even possible to use it in the business-to-consumer, or B2C, sector. As of version 2.1, the ZUGFeRD invoice meets all requirements for public administration. It also allows the creation of a pure XML file without PDF. This additional function is useful because some public contracting authority invoice receipt portals only accept structured XML invoice data.

File format

The XRechnung is a pure XML file. In contrast, the ZUGFeRD invoice is a hybrid format consisting of a visible PDF document containing an embedded XML file.

Readability

The different file formats highlight another important difference between the XRechnung and ZUGFeRD invoice. The XRechnung is only machine-readable and therefore requires special software to make the information contained in its lines of code visible to humans. Users can, but do not have to, use special software to read a ZUGFeRD invoice. In the PDF view, the users can view the contents like they would on a traditional invoice.

Processing

XRechnung invoices can only be processed automatically, (i.e. with the help of special software). ZUGFeRD invoices, on the other hand, can be transferred either automatically or manually to the recipients’ accounting systems. Businesses can also manually transfer a ZUGFeRD invoice’s information into their business’s system.

Design

Another difference between XRechnung and ZUGFeRD invoices is the potential for individual design. ZUGFeRD invoices offer businesses the flexibility to integrate their corporate design into the PDF invoice. This includes the use of logos, specific fonts, colors and other graphic elements that reflect the business’s brand. This adaptability is particularly advantageous in the B2B and B2C sectors, as it allows businesses to present their brand identity consistently, even in invoicing. In contrast, the XRechnung is purely functional and completely dispenses with visual individuality. Since it consists exclusively of machine-readable XML data, graphic elements and special formatting are not possible.

Technical requirements for invoice issuers

Creating an XRechnung requires using either special accounting software or an online generator. For most established software providers, creation of an XRechnung is already an integral part of their service package. With just a few clicks, users can create these invoices automatically, send them, and then archive them in an audit-proof manner. Online generators offer similar options, but the invoices created must be manually downloaded and archived locally. For businesses that issue a large number of invoices and need to ensure their long-term storage, using specialized software is usually the better choice. This is because software does not place any restrictions on the number of invoices created, while many online generators limit use.

Suitable software is also required to create ZUGFeRD invoices. Businesses can use specialized accounting programs, ERP systems, or extensions for existing applications.

In principle, it is also technically possible to convert existing PDF invoices into the XRechnung or ZUGFeRD invoice formats. Some service providers charge for this, but it is not recommended. Conversion is prone to errors because the PDF uses automated text recognition to read the contents of the original invoices.

Technical requirements for invoice recipients

Recipients require special software to read and further process XRechnung invoices. This is not absolutely necessary for ZUGFeRD invoices, as users can view the invoice data in the PDF like they would with conventional invoices.

Delivery

You can send both XRechnung and ZUGFeRD invoices to recipients in various ways. Options include: a file upload, sending via special transmission platforms, or sending as an email attachment. In addition, you can send invoices directly from accounting software via an appropriate interface.

Stripe Invoicing offers a practical solution for delivering electronic invoices. Businesses with a Stripe account can use the app from Stripe partner Billit to create and send invoices easily and in a legally compliant manner. After a one-time setup, the system automatically handles the delivery process. In addition, the system allows businesses to check the status of all invoices at any time. If an error occurs, users receive an immediate notification so that they can get their problems resolved quickly.

Overview: XRechnung vs. ZUGFeRD invoices