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EU VAT Invoices: Reverse Charge and Cross-Border Rules

Invoicing a business in another EU country is where most people meet the reverse charge, and where a surprising number get it wrong in a way that costs them money rather than just looking untidy. The principle is simple: for most cross-border B2B services, the customer accounts for the VAT instead of you, so you invoice without it. The conditions attached to that are where the risk sits, because if you zero-rate a supply you were not entitled to zero-rate, the VAT becomes yours to fund.

By Arshad Hossain · Published 16 August 2026

The short version

Article 226(11a) makes the words "Reverse charge" mandatory on the invoice, not optional.
B2B cross-border services are generally taxed where the customer is, so you charge no VAT.
Validate the customer's VAT number through VIES before you zero-rate anything.
Get it wrong and the VAT becomes yours to pay, usually with interest.

When the reverse charge applies

The general rule for services supplied business-to-business is that the place of supply is where the customer is established. If your customer is a taxable person in another member state, the supply is taxed there, and the reverse charge shifts the obligation to account for it onto them.

That means you issue an invoice showing no VAT, with the mandatory wording, and your customer self-accounts in their own return. For them it is usually cash-neutral: they declare the output tax and reclaim the same amount as input tax.

The rule has exceptions that matter. Services connected with immovable property are taxed where the property is. Admission to events is taxed where the event happens. Passenger transport, restaurant and catering, and short-term hire of means of transport each have their own rules. If your supply falls into one of those categories, the general place-of-supply rule does not save you.

The European Commission publishes the VAT invoicing rules, and the underlying law is Directive 2006/112/EC.

The wording is mandatory

Article 226(11a) of the VAT Directive requires the mention "Reverse charge" on the invoice. This is a legal requirement across the EU, not a stylistic convention, and an invoice missing it is defective.

The Directive requires the words themselves; it does not require you to cite an article number. Many practitioners nonetheless add the reference because it removes ambiguity for the customer's bookkeeper, giving something like: "Reverse charge — VAT to be accounted for by the recipient under Article 196 of Council Directive 2006/112/EC."

Some member states expect the local-language equivalent on invoices issued by businesses established there — Autoliquidation, Steuerschuldnerschaft des Leistungsempfängers, btw verlegd. If your own tax authority expects the national wording, use it, and adding the English alongside costs nothing.

Your own VAT identification number
The customer's VAT identification number, with country prefix
The words "Reverse charge"
A sequential invoice number and the issue date
Full names and addresses of both parties
Description and quantity of the services or goods
The taxable amount, with no VAT added
Optionally the Article 196 reference, for the customer's bookkeeper

Validate the VAT number before you zero-rate

The reverse charge depends on your customer being a taxable person in another member state. Their VAT number is your evidence of that, and an unchecked number is not evidence.

The Commission operates VIES, a free service that confirms whether a given VAT number is valid at a given date. Check it before issuing, and keep the consultation record. Some member states issue a consultation number you can retain as proof.

If the number is invalid and you zero-rated anyway, the default position is that you should have charged domestic VAT — and you will be asked for it, typically with interest. This is not a theoretical risk; it is one of the most common cross-border assessments.

Re-check periodically for recurring customers. VAT registrations get canceled, and a number that was valid when you onboarded a client two years ago may not be valid today.

Goods, distance selling and non-EU sellers

Goods follow different rules from services. Intra-Community supplies of goods to a VAT-registered business in another member state are zero-rated where the goods physically move between states and you hold evidence of that movement. The evidence requirement is real — proof of transport is what supports the zero rating.

For B2C sales of goods and digital services across borders, the One-Stop Shop regimes let you account for the destination country's VAT through a single registration rather than registering in each member state. Below a modest EU-wide threshold, micro-businesses may still charge their home rate.

If you are established outside the EU and supplying services to EU businesses, the reverse charge generally applies in the same way and you invoice without VAT. Supplying EU consumers is a different matter — that usually creates a registration obligation, commonly handled through the non-Union OSS scheme.

EU VAT invoicing questions, answered

What is the reverse charge on an invoice?

A mechanism that moves the obligation to account for VAT from the supplier to the customer. You invoice without VAT, state "Reverse charge" on the document, and your business customer declares and usually reclaims the tax in their own return.

What wording is required for a reverse charge invoice?

Article 226(11a) of the VAT Directive requires the mention "Reverse charge". Citing Article 196 alongside is common practice and helps the customer's bookkeeper, but the Directive requires the words rather than the reference.

Do I charge VAT to a customer in another EU country?

For most B2B services, no — the reverse charge applies and the customer accounts for it. For B2C sales you generally charge VAT, at the destination rate where the One-Stop Shop rules apply. Goods and property-related services follow their own rules.

What is VIES?

The VAT Information Exchange System, a free European Commission service that confirms whether an EU VAT number is valid. Check your customer's number before zero-rating a supply and keep the record, since an unvalidated number is not evidence.

What happens if my customer's VAT number is invalid?

You cannot treat the supply as B2B reverse charge on that basis. The default is that domestic VAT was due, and if you zero-rated anyway you will usually be asked for the tax plus interest. Ask the customer to confirm their registration before you invoice.

Do I need my own VAT number on a reverse charge invoice?

Yes. Both VAT identification numbers must appear — yours and the customer's, each with its country prefix. An invoice showing only one of them is defective, and the customer's accountant will usually send it back.

Does reverse charge apply to goods as well as services?

Goods moving between member states to a VAT-registered business are handled as zero-rated intra-Community supplies, which requires evidence that the goods physically moved. Some member states also apply domestic reverse charges to specific goods such as electronics or construction.

What is the One-Stop Shop?

A scheme letting you account for VAT due in other member states on cross-border B2C sales through a single registration and return, rather than registering in each country. Union and non-Union variants exist depending on where you are established.

Do I charge VAT to a UK customer from the EU?

The UK is outside the EU VAT area, so intra-Community rules no longer apply. B2B services to UK businesses are generally outside the scope of EU VAT, with the UK customer accounting under their own rules. Goods movements are imports and exports.

Can I issue an EU invoice in a non-euro currency?

Yes, the invoice may be in any currency, but the VAT amount must also be expressed in the currency of the member state where the tax is due, using an accepted exchange rate. Where reverse charge applies there is no VAT figure to convert.

How long must EU invoices be kept?

Retention periods are set nationally and commonly run from six to ten years. Keep both the invoice and the evidence supporting your VAT treatment — VIES checks, transport documents — because the treatment is what gets questioned, not the invoice alone.

Do I need to charge VAT as a non-EU business selling to the EU?

For services to EU businesses, generally no — the customer applies the reverse charge. Selling to EU consumers usually creates an obligation to register and account for destination-country VAT, most often through the non-Union One-Stop Shop scheme.

What is an intra-Community supply?

A supply of goods dispatched from one member state to a VAT-registered business in another. It is zero-rated provided the customer's VAT number is valid and you hold evidence the goods physically moved. Without that evidence the zero rating fails.

Frequently Asked Questions

Is reverse charge the same in every EU country?

The framework is common because it comes from the VAT Directive, but member states differ on domestic reverse charges for specific sectors, on required invoice language, and on retention periods. Check the rules of the state where you are established.

Do I include reverse charge supplies in my VAT return?

Yes. They are reported as supplies even though no VAT is charged, and services generally also go on an EC Sales List or its national equivalent. Omitting them is a reporting failure even though no tax was collected.

What if my EU customer is not VAT-registered?

Then the reverse charge does not apply, because it depends on the customer being a taxable person. Treat the supply as B2C, which usually means charging VAT — at the destination rate for digital services and distance sales under the OSS rules.

Sources

VAT invoicing rules — European Commission, Taxation and Customs Union
Council Directive 2006/112/EC on the common system of VAT — EUR-Lex

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