"Do I use the reverse charge or the One-Stop Shop?" is one of the most common questions from EU freelancers who sell across borders. They solve different problems, and for services the deciding factor is almost always who the client is.
The short answer
- Client is a business in another EU country → reverse charge (no VAT on your invoice).
- Client is a consumer and the service is taxed in their country (typically digital services above the threshold) → charge their country's VAT and declare it through the OSS.
- Client is a consumer and the service is taxed in your country (most other services) → your normal domestic VAT; neither OSS nor reverse charge.
Reverse charge: B2B
For B2B services under the general rule, the place of supply is the customer's country (Article 44 of the VAT Directive) and the customer pays the VAT (Article 196). You report the sale in your VAT return and EC Sales List but charge no VAT. Full details in our reverse charge guide.
OSS: B2C taxed in another country
The One-Stop Shop (OSS) has applied since 1 July 2021. The Union scheme lets an EU business declare and pay, in one quarterly return filed in its home country, the VAT due in other member states on B2C services (and intra-EU distance sales of goods). Your tax authority passes the money on. Without the OSS you would have to register for VAT in each of those countries.
For service freelancers, the main B2C services taxed in the customer's country are telecommunications, broadcasting and electronically supplied services (Article 58). Some other B2C services also have special rules (for example services connected with property, or certain event services), and they can also be declared through the OSS where they are taxed in a country where you are not established.
Is my service "electronically supplied"?
This term is narrower than "anything delivered online". Electronically supplied services are those delivered over the internet that are essentially automated, with minimal human intervention, and impossible without the technology. Typical examples: downloadable templates and e-books, software and SaaS subscriptions, online courses without live teaching, website hosting.
By contrast, the following are generally not electronically supplied services even if you deliver them by email or video call: bespoke consulting, a custom-designed logo, a translation, live one-to-one coaching. The full rules and examples are in Implementing Regulation (EU) No 282/2011 (Article 7 and Annex I). Borderline cases are common, so check with your tax authority if unsure.
The EUR 10,000 threshold
If you are established in only one member state and your total cross-border B2C sales of telecom, broadcasting and electronically supplied services (plus intra-EU distance sales of goods) stay at or below EUR 10,000 per calendar year across the whole EU, these supplies can stay taxed in your own country (Article 59c). Once you exceed it, or opt to apply it from the first euro, the customer's country VAT applies, typically via OSS.
Decision table
| Client | Service | VAT treatment (general rule) |
|---|---|---|
| Business, other EU country, valid VAT ID | Most services | Reverse charge, no VAT on invoice |
| Consumer, other EU country | Consulting, design, writing, live coaching… | Your home VAT |
| Consumer, other EU country | E-books, templates, SaaS, recorded courses | Home VAT up to EUR 10,000 EU-wide; above that customer's country VAT via OSS |
| Business or consumer, outside the EU | Most services | B2B generally outside EU VAT; B2C rules vary: check |
| Anyone | Event tickets, property-related services | Special rules: get advice |
Look up the rate you would charge in the EU VAT rate table. National details on registration and OSS deadlines: check locally.