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Guide

Reverse charge VAT for EU freelancers: a plain-English guide

When the reverse charge applies to your B2B services, what goes on the invoice, and what you report. With Directive references.

Last checked against official sources: · Written with AI assistance and reviewed · Not tax advice

If you are a freelancer in one EU country and you invoice a business in another, you will meet the reverse charge almost immediately. It sounds technical, but for most service freelancers it comes down to three things: don't charge VAT, put the right note on the invoice, and report the sale correctly.

What the reverse charge is

Normally the supplier charges VAT and pays it to the tax authority. Under the reverse charge, the customer is liable for the VAT instead. For cross-border B2B services this is set by Article 196 of the EU VAT Directive (Council Directive 2006/112/EC): VAT is payable by the business customer when the supplier is not established in the customer's member state.

The client declares the VAT in their own VAT return at their own country's rate and, if they are entitled to, deducts it in the same return. For a fully taxable business the net effect is often zero, which is why clients rarely object.

When it applies to your services

The general place-of-supply rule for business-to-business services (Article 44) says the service is supplied where the customer is established. Combine that with Article 196 and you get the usual freelancer checklist. The reverse charge normally applies when:

  1. You act as a business (a "taxable person") established in one EU country.
  2. Your client is a business established in a different EU country. In practice this means they give you a valid VAT identification number, which you check in VIES.
  3. The service falls under the general rule: consulting, software development, design, marketing, copywriting, translation, admin support and most other "desk" services.

If you are under a small-business VAT exemption at home, the rule still applies to the service, but you may need a VAT number for cross-border B2B services anyway (Article 214(1)(d) requires member states to identify taxable persons supplying such services). Check locally before your first EU invoice.

Services where it does not apply

The VAT Directive has special place-of-supply rules that override the general B2B rule. The most relevant for freelancers:

  • Services connected with immovable property (Art. 47): e.g. architects' work on a specific building, property management, construction. Taxed where the property is.
  • Admission to events (Art. 53): selling tickets to a conference, workshop or show you organise. Taxed where the event takes place.
  • Restaurant and catering services (Art. 55) and passenger transport (Art. 48).
  • Short-term hire of means of transport (Art. 56).

If one of these applies you may have to register or charge VAT in another country. Get advice before invoicing.

What to put on the invoice

A reverse-charge invoice is a normal full VAT invoice (see the Article 226 checklist) with these specifics:

  • The mention "Reverse charge": required by Article 226(11a). Many freelancers add a reference such as "VAT to be accounted for by the customer under Article 196 of Council Directive 2006/112/EC".
  • Your VAT number and the client's VAT number (Art. 226(3) and (4)).
  • No VAT amount charged: show the net amount, VAT 0 or "not charged".
  • Issue it on time: for these services, by the 15th day of the month after the month the service was performed (Art. 222).
Example: "Reverse charge: VAT to be accounted for by the customer under Article 196 of Council Directive 2006/112/EC. Customer VAT ID: DE123456789."

Our reverse charge wording generator produces this text in English and in the German, French, Spanish, Italian and Dutch wording of the Directive.

What you report afterwards

  • Your VAT return: the net value of reverse-charge services usually goes in a separate box. You do not pay VAT on it.
  • Recapitulative statement (EC Sales List): Article 262 requires you to list B2B services to other member states where the customer pays the VAT under Article 196, with each client's VAT number and the totals. Frequency (monthly or quarterly) and deadlines are national.

Box numbers, form names and deadlines differ in every country: check locally.

Reverse charge when you buy services

It works the other way too. When you buy B2B services from a supplier in another EU country (for example an EU software subscription invoiced without VAT, or a subcontractor), you may have to self-account for VAT in your return at your country's rate and, if entitled, deduct it. Non-EU suppliers (e.g. many SaaS companies) can also trigger self-assessment. Ask your accountant how your country handles this if you are not VAT registered.

Tracking which sales and purchases were reverse-charged is the fiddly part.Freelancer Money OS – EU Edition is a €19 spreadsheet that does this for you (Excel + Google Sheets).

Common mistakes

  • Charging your home VAT to an EU business client. The client cannot normally deduct foreign VAT in their return, so they will ask you to re-issue the invoice.
  • Not checking the VAT number. A missing or invalid number can make you liable for the VAT.
  • Forgetting the EC Sales List because no VAT was due. The sale still has to be reported.
  • Using "exempt" wording instead of "Reverse charge". They are different things legally.
  • Applying it to a private individual. B2C services follow different rules; see OSS vs reverse charge.

FAQ

Do I charge VAT to a business client in another EU country?
For most services, no. If the client is a business with a valid VAT number in another member state, the place of supply is the client's country (Art. 44) and the client accounts for the VAT (Art. 196). Your invoice shows no VAT and the mention "Reverse charge".
Is reverse charge the same as zero-rated or exempt?
No. The service is taxable; the VAT is simply paid by the customer instead of you. That is why you still report the sale and why you normally keep the right to deduct VAT on your related costs.
What if my client has no VAT number?
The VAT number is the normal evidence that the client is acting as a business. Without it you risk having to charge VAT yourself as if it were a B2C sale. Ask for the number and check it in VIES before invoicing.
Does the reverse charge apply to clients outside the EU?
Article 196 is an intra-EU mechanism. For B2B services to clients outside the EU, the place of supply under Article 44 is generally outside the EU, so no EU VAT is charged; the client's country may have its own rules. Invoice wording is typically along the lines of "outside the scope of EU VAT"; check locally.

Sources (official)

Last checked: . General information, not tax or legal advice. Rules and national details change: check locally with your tax authority or an accountant.