Guides

Reverse charge: invoicing a business in another EU country

When you charge 0% and write “reverse charge” instead of adding VAT, what must appear on the invoice, and the one number to verify first.

Reverse charge is the mechanism that stops cross-border B2B trade inside the EU from requiring every supplier to register for VAT in every customer’s country. Instead of you charging VAT and remitting it, the customer accounts for it themselves at their own rate. Your invoice shows no VAT — and has to say why.

When it applies

The usual case is a service supplied to a VAT-registered business in another EU member state. Under the general place-of-supply rule for B2B services, the supply is treated as taking place where the customer is established, so the customer accounts for the VAT.

It does not apply to consumers. Selling to a private individual in another member state is a different regime, and the rate is generally the customer’s.

There are carve-outs. Land-related services, admission to events and several other categories have their own rules. If your work attaches to a specific property or a physical event, check before assuming.

What the invoice has to show

The legal basis is Article 196 of Council Directive 2006/112/EC. Citing it is a widespread convention rather than a universal requirement — member states word their own rules slightly differently — and including it answers the question before your client’s bookkeeper asks it.

• Your VAT identification number.
• Your customer’s VAT identification number, printed on the invoice.
• A VAT rate of 0%, or no VAT line at all depending on your accounting software.
• An explicit statement that the reverse charge applies. The commonly used wording is below.

Verify the VAT number before you invoice

The European Commission runs VIES, a free public service that confirms whether a VAT number is valid for intra-EU transactions. Check it and keep the confirmation. If the number turns out to be invalid, the treatment can fall back on you — meaning you owe VAT you never charged.

This is the most common way a reverse-charge invoice goes wrong, and it is avoidable in about thirty seconds.

If you are outside the EU

A supplier established outside the EU generally does not charge EU VAT on B2B services at all: the supply is outside the scope of your own VAT system and the customer self-accounts. You are not applying Article 196 yourself, but a short note such as “VAT to be accounted for by the recipient” saves your client’s finance team a query.

Wording you can copy

Reverse charge — VAT to be accounted for by the recipient
Article 196, Council Directive 2006/112/EC

Supplier VAT no.: DE123456789
Customer VAT no.: FR12345678901

Worth knowing

• Reverse charge changes who reports the VAT, not whether VAT exists. Your customer still pays it, to their own tax authority.
• This describes the general B2B services rule as at August 2026. Your registration status and the nature of the supply decide the outcome — that is a conversation with your accountant, not with a web page.