What if my customer has no valid EU VAT number?

Then you generally cannot treat the supply as a B2B reverse charge. Ask them first — the number may be a domestic-only registration, mistyped, or newly issued and not yet visible in VIES. If they genuinely are not registered, the default position is that you treat them as a non-business customer and charge VAT under your own domestic rules, or under the One Stop Shop for digital services. Because the consequences fall on you as the supplier, check with your accountant before issuing.

Does the reverse charge apply to UK customers after Brexit?

Not under Article 196, because the UK is no longer in the EU VAT area. Services supplied by an EU business to a UK business are generally outside the scope of EU VAT, and the UK customer normally accounts for UK VAT under the UK's own reverse charge rules. Supplies in the other direction work similarly. The invoice wording differs from the intra-EU version, so use a UK-specific setup rather than the Article 196 preset, and confirm the treatment for your particular service.

Do I still need to record the sale if I charge no VAT?

Yes. The supply belongs in your VAT return, and in most member states it also has to be reported on a recapitulative statement or EC Sales List showing each customer's VAT number and the value supplied. The reverse charge removes the tax you collect, not the reporting you owe.

Can I use the reverse charge for goods shipped to an EU business?

Cross-border B2B goods within the EU are handled as an exempt intra-Community supply with the customer making an intra-Community acquisition, which is a different provision from the Article 196 services reverse charge. You still need the customer's valid VAT number and proof the goods left your country, but the invoice reference should point to Article 138 rather than Article 196.

Guide

How to invoice an EU business under the reverse charge

If you supply services to a VAT-registered business in another EU member state, you usually do not charge VAT. Instead, your customer accounts for it themselves in their own country at their own rate, then reclaims it in the same return. This is the reverse charge mechanism, and it exists so that businesses do not have to register for VAT in every country they buy from. The catch is that your invoice has to prove the supply qualifies — and an invoice missing the customer's VAT identification number or the required wording gives their tax authority a reason to challenge it.

This guide covers when the reverse charge applies, why the VAT line reads 0%, the two VAT numbers you must show, how to verify your customer in VIES, and the wording that belongs on the document. Crossbill has an EU cross-border reverse charge preset that fills in the statement and the VAT-number fields for you, but the rules below are worth understanding whichever tool you use.

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When the reverse charge applies — and when it doesn't

The general place-of-supply rule for business-to-business services (Article 44 of Council Directive 2006/112/EC) says the supply is taxable where the customer is established, not where you are. Article 196 then makes that customer liable to pay the VAT. So a design studio in Dublin billing a manufacturer in Milan makes a supply taxable in Italy, and the Italian customer accounts for the Italian VAT.

Three conditions have to hold: you and your customer are established in different member states; your customer is a taxable person acting as such — in practice a VAT-registered business, not a consumer; and the service falls under the general rule.

It does not apply to consumers. A B2C sale means charging VAT under your own domestic rules, or using the One Stop Shop where the supply is a telecoms, broadcasting or electronic service taxed where the customer lives. It does not apply to domestic supplies — a French supplier billing a French company charges French VAT as normal. And it does not apply to services with special place-of-supply rules, which are taxed where the activity happens rather than where the customer sits: work on immovable property such as construction or surveying (Article 47), admission to events, restaurant and catering services, passenger transport, and short-term hire of a means of transport.

Goods are a separate regime. A cross-border B2B sale of goods within the EU is an exempt intra-Community supply with the customer making an intra-Community acquisition — similar in effect, different in law and different in the wording you should use.

Why the VAT line shows 0%

A reverse-charge invoice shows the net amount, a VAT figure of nil, and a total equal to the net. That nil is not an exemption and not a zero rate — the tax has not disappeared, it has moved. Your customer self-assesses output VAT at their domestic rate and, if they have full recovery, deducts the same amount as input VAT in the same return. The cash effect for them is usually zero; the reporting obligation is not.

On your side, you keep the right to deduct input VAT on costs relating to that supply, and you normally have to declare the supply on a recapitulative statement (still called an EC Sales List in some countries), listing each customer's VAT number and the value supplied. Filing frequency and deadlines vary by member state — check your own tax authority's guidance, because a missing recapitulative statement is one of the most common ways an otherwise correct reverse charge unravels.

Both VAT numbers must appear on the invoice

Article 226(3) requires your own VAT identification number. Article 226(4) requires the customer's VAT identification number wherever they are the person liable for the tax — which is exactly the reverse-charge case. One number is not enough; the invoice needs both, each with its two-letter country prefix and no spaces, for example IE1234567FA and IT12345678901.

Alongside those, a compliant invoice still needs everything else Article 226 asks for: a sequential number that uniquely identifies the document, the date of issue, the date of the supply where it differs, the full name and address of both parties, a description of the services sufficient to identify them, the quantity or extent supplied, the taxable amount, and the total.

Getting the customer's number onto the document is not a formality. In practice it is the evidence that the supply was B2B, and several member states treat a valid, correctly quoted number as central to accepting the treatment.

Verifying the customer's VAT number in VIES

VIES is the European Commission's VAT Information Exchange System, free to use at the Commission's taxation website. It does not hold a central database — it forwards your query to the relevant national tax authority in real time and returns the answer.

Check the number before you issue the invoice, not after. If you enter your own VAT number as the requester, VIES issues a unique consultation number; save it, along with the date, as your evidence that the number was valid at the time of supply. Some member states return the trader's name and address so you can confirm you are billing the entity you think you are; others return only valid or invalid.

A "service unavailable" response means that country's system is down, not that the number is bad — retry later rather than assuming the worst. If the number genuinely comes back invalid, stop and ask the customer: it may be a domestic-only registration number rather than an EU VAT identification number, or the registration may have lapsed. Without a valid number you generally cannot treat the sale as B2B, which means charging VAT and possibly having to correct it later.

The wording to put on the invoice

Article 226(11a) requires the invoice to carry the mention "Reverse charge" where the customer is liable for the tax. That short phrase is the legal minimum, but most businesses use a fuller line so the recipient's bookkeeper is in no doubt:

"Reverse charge: VAT to be accounted for by the recipient under Article 196 of Council Directive 2006/112/EC."

Put it near the totals where it will actually be read, not in small print at the bottom. Some member states expect the statement in their own official language as well as English, so if you invoice heavily into one country it is worth asking your customer's accounts team what they need to see. For intra-Community supplies of goods you would reference Article 138 instead, with different wording.

Crossbill's EU reverse charge preset applies the Article 196 statement, adds dedicated fields for both VAT identification numbers, and holds the VAT line at 0% so a rate cannot be applied by accident. Everything is generated in your browser and the invoice data never leaves your device.

This page is general information, not tax or legal advice. VAT rules differ between member states and change over time — confirm your position with your own accountant or national tax authority before relying on it.

Templates and tax presets are provided for convenience and are not tax or legal advice. Verify the correct fields, rates and wording for your situation before sending.