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Advantages of the ZUGFeRD standard for modern businesses

June 11, 2024
Minutes reading time

Find out how the ZUGFeRD standard modernises invoice processes. A simple, efficient solution for increasing digitalisation!

As digitalisation progresses, the ZUGFeRD invoice is becoming an increasingly important standard in Germany. In a previous blog post, we already highlighted in some detail the advantages of XRechnung for businesses. Today we want to focus on the unique advantages of ZUGFeRD and how this standard can change business processes.

What is ZUGFeRD?

The Forum for Electronic Invoicing Germany (Forum elektronische Rechnung Deutschland, or FeRD for short) developed the ZUGFeRD format with the support of the German Federal Ministry Economics and Energy. ZUGFeRD stands for "Zentraler User Guide Forum elektronische Rechnung Deutschland" (which translates to "Central User Guide Forum Electronic Invoice Germany") and combines PDF documents with integrated XML files. This enables standardised reading and processing of invoice data and, in the medium to longer term, is intended to replace the OCR (Optical Character Recognition) currently in use.

ZUGFeRD compared to XRechnung

Both standards are based on the EN 16931 standard. While XRechnung is a purely XML-based format (i.e. only structured data, and therefore difficult for humans to read), ZUGFeRD combines PDF and XML. This enables easy integration into existing systems and offers flexibility for different company requirements. ZUGFeRD was developed specifically for the business sector and, with the ZUGFeRD 2.1.1 profile, also takes into account the requirements of the administration and the official requirements for e-invoicing in Germany.

Areas of application and structure of ZUGFeRD

ZUGFeRD can be used in various types of transactions such as business-to-business (B2B), business-to-government (B2G) and business-to-consumer (B2C). In this hybrid format, each invoice consists of both an invoice image (visualisation as PDF) and structured invoice data (XML file), which are integrated into a PDF/A-3 file. This facilitates the electronic processing of the invoice, enables standardised further processing of the data and at the same time preserves legibility for humans.

Although both PDF and XML must comply with the requirements of Section 14 (4) of the German Value Added Tax Act (Umsatzsteuergesetz UStG) in order to represent multiple versions of the same invoice with the same content, there is no guarantee that PDF and XML will always have the same content. The parties involved (sender and recipient) are therefore recommended to introduce their own checking mechanisms to ensure that the content of the two invoices is identical.

PDF and/or XML, which is binding?

Have you noticed a discrepancy between the visualisation and the embedded data set? As the tax authorities have not specified which of the two components is relevant until the upcoming introduction of the e-invoicing obligation, the key question is which component is legally binding in your case?

According to ZUGFeRD's tax assessment, whether the invoice image (i.e. the PDF file) or the structured invoice data (i.e. the XML file) is binding for a ZUGFeRD invoice depends on the recipient's invoice receipt procedure: depending on whether the taxpayer chooses the internal control procedure based on the invoice image, the invoice data or both (so-called mixed procedure), the corresponding component is considered binding. More information can be found here.

However, according to a letter from the Federal Ministry of Finance (BMF) dated October 2, 2023 (III C 2 - S 7287-a/23/10001 :007), with the imminent introduction of the e-invoicing obligation, which was adopted as part of the Growth Opportunities Act on March 22, 2024, the structured part in a hybrid format will take precedence in future, contrary to today's provision in Section 14.4 (3) sentence 4 UStAE (current version of the VAT Application Regulation). We think this is an important clarification! In the event of discrepancies, the data from the structured part (XML) will then take precedence over the data from the image file (PDF). Although this changes the relationship between the different parts of the ZUGFeRD invoice, it does not change the fundamental permissibility of a hybrid format.

Advantages of ZUGFeRD

Many of the benefits we highlighted in our previous blog on XRechnung also apply to the ZUGFeRD invoice. Let's take a look at the main advantages that using this hybrid format offers modern businesses:

  1. Standardisation and automation: ZUGFeRD is an industry-independent and international standard that enables the standardised automated reading of data such as invoice amount and invoice number, which eliminates manual intervention and reduces errors.

  1. Versatility: The format not only supports B2B invoices, but can also be adapted to the needs of businesses in various profiles such as "Basic" and "Comfort". With the "Extended" profile, it is also possible to extend the ZUGFeRD format for specific industries and interest groups.

  1. International applicability: Based on CEN standards and Directive 2014/55/EU, ZUGFeRD can be used throughout the EU and internationally.

  1. No format agreement: The invoice can be sent without prior agreement on the format between the parties. A very important aspect!

  1. Revision security: ZUGFeRD invoices are searchable and meet all legal requirements for revision security.

  1. Efficiency: Automated payment processes and the simplified posting of invoice data optimise the business processes between companies and tax consultants.

  1. Flexible use: Today, both the PDF and XML components can be considered as binding invoice documents depending on the verification process. In addition, no technical protocol is required for transmission and invoices can simply be exchanged electronically (e.g. by e-mail).


ZUGFeRD offers a range of benefits that enable businesses to optimise their invoicing processes and efficiently adapt to the demands of digitalisation. By combining PDF and XML, ZUGFeRD offers additional flexibility, which is an advantage for both national and international businesses. This is an advantage that should not be underestimated, especially for those companies that exchange invoices with large corporations, SMEs, public authorities and perhaps even end consumers!

However, it is important to emphasise that the decision between XRechnung and ZUGFeRD depends on the specific requirements and operational context of each business. By understanding the features, differences and benefits of these standards, businesses can optimise their invoicing processes accordingly. Regardless of the standard used, the overall benefits of e-invoicing highlight the potential for greater efficiency, cost savings and environmental responsibility in today's digital landscape.


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