When you sell a service to a VAT-registered business in another EU country, the general rule is that the service is taxed where the customer is, and the customer pays that VAT under the reverse charge mechanism. Your invoice shows no VAT, lists both parties' VAT numbers and says "Reverse charge". You verify the client's VAT number in VIES, issue the invoice by the 15th of the month after the supply, and report it in your recapitulative statement. This holds whether or not you are a full VAT payer at home, although you usually need a VAT identification number to do it.
Below: the rule, the exceptions, a checklist of what goes on the invoice, a worked example, and the mistakes we see most often. The legal basis is the EU VAT Directive (2006/112/EC); national details differ, so the notes below flag where.
The rule in one paragraph
For services supplied to a business (B2B), the place of supply is where the customer is established (Article 44 of the VAT Directive). If you are established in a different member state, the customer is liable for the VAT in its own country (Article 196). It declares the VAT and, in most cases, deducts it in the same return, so no money changes hands with any tax office. That is the reverse charge.
Step 1: confirm your client is a business and check the VAT number
Reverse charge only applies when the customer acts as a taxable person. In practice that means you need its VAT number and you should check it in VIES, the European Commission's VAT number validation service.
Check the number before you issue the invoice, not after.
Enter your own VAT number as the requester. VIES then gives you a consultation number, which is useful evidence that you checked.
Use the VAT number, not the company registration number. A German Handelsregister number or a French SIREN is not a VAT ID.
If the number does not validate, ask the client. A business that has just registered may not appear yet. Without a valid number you are on weaker ground treating the client as a business.
Step 2: check the service follows the general rule
Most freelance work does: software development, design, consulting, marketing, writing, translation, accounting. Several categories have their own place of supply rules and are not automatically reverse charged:
Services connected with real estate (taxed where the property is)
Admission to events, such as conference tickets (taxed where the event takes place)
Passenger transport
Restaurant and catering services
Short-term hire of vehicles
Goods are a separate regime (intra-Community supplies), with their own conditions on transport and evidence. This article covers services.
Step 3: make sure you have a VAT identification number yourself
Member states must give a VAT identification number to businesses that supply services taxed in another member state under reverse charge, even if they are below the domestic VAT threshold. The name and the formalities vary:
In Czechia a non-VAT payer becomes an identified person (identifikovaná osoba) and must apply within 15 days of supplying such a service.
In Germany, a small business using the Kleinunternehmer scheme applies for a USt-IdNr.
Other countries have equivalent procedures. Check with your tax office before your first EU invoice.
Becoming identified usually does not make you a full VAT payer. You do not charge VAT on your domestic sales because of it.
Step 4: what the invoice must contain
Article 226 of the VAT Directive lists the mandatory details. For a reverse charge service invoice, check these:
| Item | Note |
|---|---|
| Invoice date and a unique sequential number | Same numbering series as your other invoices |
| Your name, address and VAT number | The VAT number, with country prefix (for example CZ, DE) |
| Customer's name, address and VAT number | The number you checked in VIES |
| Description and quantity of the services | Specific enough to identify the service |
| Date the service was supplied, if different from the invoice date | Or the period, for ongoing work |
| Net amount | No VAT line, or VAT shown as zero |
| The words "Reverse charge" | Article 226(11a). You can add the local equivalent, for example "Daň odvede zákazník" in Czech |
Do not add your home VAT rate "just in case". If you charge VAT that is not due, the customer cannot deduct it and will ask you for a corrected invoice.
Step 5: issue it on time
For reverse charge services, the invoice must be issued no later than the 15th day of the month following the month in which the service was supplied (Article 222). Ongoing monthly work therefore needs a monthly invoice, not one at the end of the project.
Step 6: report it
You list the sale in a recapitulative statement (EC Sales List; souhrnné hlášení in Czechia, Zusammenfassende Meldung in Germany) with the customer's VAT number and the amount. Frequency and deadlines are national: in Czechia it is filed monthly, by the 25th day after the end of the month. Full VAT payers also show the supply in their VAT return.
The tax authorities match your statement against the customer's declaration. A mismatch is the most common reason for a letter.
A worked example
A Czech freelance developer, not a VAT payer at home, builds a feature for a German GmbH in October for €4,000.
She checks the GmbH's DE VAT number in VIES and saves the consultation number.
She is already registered as an identified person (she applied within 15 days of her first EU service).
She issues an invoice in euro on 31 October: both VAT numbers, "Software development, October 2026", €4,000, no VAT, "Reverse charge / Daň odvede zákazník".
She files the recapitulative statement for October by 25 November.
For her Czech income tax, the €4,000 is converted into crowns under the usual rules.
The German client declares German VAT on €4,000 and deducts it in the same return. Nobody pays anything extra.
What about consumers and the SME scheme?
Sales of services to private individuals (B2C) follow different rules. The general B2C rule taxes the service where the supplier is established, so a non-VAT payer usually charges nothing. Digital services to consumers in other member states (apps, online courses, streaming and similar) move to the customer's country once your EU-wide sales of them exceed €10,000 a year, and are usually declared through the One Stop Shop (OSS).
Since 1 January 2025, the EU's SME scheme lets small businesses apply the VAT exemption in other member states too, where they would otherwise owe VAT there. The conditions: you are established in the EU, your total EU turnover is at most €100,000, and your sales in each country stay below that country's own exemption threshold (at most €85,000). You register in your home country and receive an identification number with the suffix EX. For reverse charge B2B services, as above, you do not need the SME scheme: the customer accounts for the VAT anyway.
Common mistakes
Charging home VAT to an EU business customer instead of applying reverse charge.
Using the company registration number instead of the VAT number.
Not checking VIES, or checking only once years ago.
Missing the "Reverse charge" wording.
Forgetting the recapitulative statement because no VAT was charged.
Not registering for a VAT identification number before the first EU invoice.
Treating a conference ticket or an apartment renovation like a consulting service.
How MoneySky helps
When you add a client from another EU country, MoneySky checks its VAT number against VIES before you issue the invoice. You can apply reverse charge to EU business customers, issue invoices in any currency, and download each invoice as a PDF or as a Peppol BIS 3.0 e-invoice. Incoming payments are matched to open invoices automatically from your bank feed, and the VAT monitor tracks your Czech turnover against the registration threshold. More on the invoicing page.
This article explains the general EU rules and is not tax advice. Local deadlines and registration rules differ, so check with your tax office or adviser for your own situation.
FAQ
Do I charge VAT when invoicing a business in another EU country?
For most services, no. If the customer is a business with a valid VAT number in another member state, you invoice without VAT and the customer accounts for it under reverse charge.
What exactly should I write on a reverse charge invoice?
The words "Reverse charge", both VAT numbers and no VAT amount. Many people add the local language equivalent as well.
Do I need to be VAT registered to use reverse charge?
You need a VAT identification number. In many countries a small business gets one without becoming a full VAT payer, for example as an identified person in Czechia.
What if the client's VAT number is not valid in VIES?
Ask the client to confirm it before you invoice. Without a valid number you cannot comfortably treat the client as a business, and you may need to apply the rules for consumers instead.
Can I invoice in euro if my home currency is different?
Yes. The invoice can be in any currency. Your own tax records and reports use your national currency, converted under your country's rules.
Do I have to send these invoices as e-invoices?
Not yet. Cross-border B2B invoices can be PDF until mandatory e-invoicing for intra-EU supplies starts on 1 July 2030. See our overview of EU e-invoicing deadlines.