RateNest

Place of supply

Who actually owes the VAT?

Answer four questions. RateNest tells you whether to charge your rate, the customer’s rate, or nothing, and which sentence belongs on the invoice.

Customer

Intra-EU reverse charge

Do not charge VAT. The buyer accounts for it.

B2B services between different EU countries are generally taxed where the customer is established. You invoice at 0% and write that the reverse charge applies. The customer declares both output and input VAT in their own return. Digital services follow the same B2B rule.

  • Collect the customer’s EU VAT number and check the format before you send the invoice.
  • Add: “Reverse charge. VAT to be accounted for by the recipient (Article 196, Directive 2006/112/EC).”
  • Report the sale in your EC Sales List where your member state requires it.
Reverse charge guideCreate the invoiceCompare VAT rates

A place-of-supply sketch for planning. It is not a ruling and it skips sector-specific domestic reverse charges.

The short version

Domestic sales charge domestic VAT. Business customers in another EU country usually reverse charge services. Consumers of digital services are taxed where they sit, which is why the One Stop Shop exists. Goods that leave the EU can be zero-rated exports if you can prove they left.

The €10,000 threshold is an EU-wide convenience for small Union sellers of distance goods and digital services. It is not a free pass for businesses established outside the EU, and it is not a substitute for reading the supply you actually make.

What does reverse charge mean?

You invoice with no VAT, and the business customer declares the VAT on their own return. It is the normal treatment for B2B services between different EU countries.

Does reverse charge apply to consumers?

No. Consumers cannot reverse charge. Digital services to EU consumers are taxed where the consumer lives, often through the One Stop Shop.

Is the UK still in the EU VAT system?

No, except for the special goods rules that involve Northern Ireland. UK to EU B2B services are generally outside UK VAT, and the EU customer self-accounts.