As part of the ongoing digitalization and modernization of administration in Germany, a significant innovation is imminent: from 2025, the business identification number (Business-Id No.) will be introduced for companies. However, the allocation of the business identification number could also start as early as October 2024. However, there are sufficient transitional arrangements for its introduction and implementation.
This number will be a central component in future dealings with authorities, in particular the tax office, and is intended to simplify tax processes considerably. But what does this mean for you as an entrepreneur and how can you best prepare for this changeover?
What is the business identification number?
The business identification number is a new, unique identification number that is assigned to every company in Germany. It is used to clearly and unambiguously identify companies in their entire business life. The main aim is to make processes with authorities, such as the handling of tax matters, faster and more efficient.
Similar to the tax identification number, which has existed for private individuals since 2008, the Business-Id No. will act as a central reference point in communication between companies and the administration. However, it will be introduced in addition to existing identification numbers, such as the VAT identification number or the tax number.
What do you need to do now as an entrepreneur?
The good news is that there is currently no immediate need for you to take action. The business identification number will be assigned to you automatically by the tax authorities as soon as the changeover begins. This is expected to take place in 2025.
Nevertheless, it is advisable to familiarize yourself with the upcoming changes today and to review the internal processes in your company. You should keep an eye on the following points in particular:
- Updating internal processes: Make sure that your accounting and administration systems are flexible enough to accommodate the Business-Id No. and integrate it into your business processes.
- Communication with business partners: Inform your business partners in good time about the upcoming changeover. In future, the Business-Id No. could be used in various business documents such as invoices, contracts or for tax processing.
- Prepare digital solutions: Consider how you can further digitalize your processes to make data exchange with the authorities seamless.
Advantages of the business identification number
The introduction of the Business-Id No. brings a number of advantages for companies:
- Simplification of bureaucracy: The uniform identification number eliminates the need to use different numbers in different contexts. This reduces errors and saves time when communicating with authorities.
- Efficient data exchange: The Business-Id No. simplifies the exchange of company data between different authorities. This helps to speed up administrative processes and minimize the workload for your company.
- Improved tax transparency: The clear and unambiguous identification of companies helps to prevent tax fraud and enables the tax authorities to better monitor tax obligations.
- Sustainable administration: The business identification number is a further step towards a modern, digital administration that meets the requirements of the globalized economy and digitalization.
What needs to be considered with regard to e-billing?
In connection with the introduction of the Business-Id No., the electronic invoice (e-invoice) is also gaining in importance. The Business-Id No. could play an important role in the issuing and transmission of e-invoices in the future. You should therefore convert your invoicing processes to digital solutions now.
Since the introduction of the EU directive on e-invoicing in the public sector (since November 2020), companies have been obliged to use e-invoices when providing services to public clients. This regulation could be extended to other business areas in the future in order to further improve tax transparency and simplify processes.
Therefore, you should already today:
- Check your invoicing software: Ensure that your systems are able to create and send e-invoices in accordance with the prescribed standards.
- Consider the future use of the Business-Id No. for invoices: Make sure that your accounting systems are prepared in such a way that the Business-Id No. can be easily integrated into the e-bill.
Of course, we can spoil something at this point: easybill is already prepared for the Business ID and has created a separate field in the layout. This means that easybill users can comply with the implementation in any case.
Our recommendation: Be prepared!
The introduction of the business identification number is a significant step towards digitalized and simplified administration. As an entrepreneur, you will benefit from less bureaucracy, more efficient processes and improved transparency in the tax system.
Even if there is currently no acute need for action, it is advisable to review internal processes now and familiarize yourself with the upcoming changeover. The W-IdNr. will play a central role in the future, particularly in connection with e-billing. So take the opportunity to modernize your accounting systems and optimize your business processes in order to benefit as much as possible from the upcoming changes.
Stay informed and prepare for the new business identification number today – for more efficient and future-proof company management!
Read also:
Effectively monitor delivery thresholds in international trade
E-invoice 2025: current information for entrepreneurs
E-invoicing for small businesses: step-by-step guide