Selling to Business Buyers in Other EU Countries: Intra-Community Supply Explained

When you sell goods to a VAT-registered business in another EU country and the goods are transported there, the sale is normally an intra-community supply: you invoice without VAT and the buyer accounts for VAT at home. For printers, packaging and sign companies, that makes a buyer two countries away almost as easy to serve as one at home, as long as the paperwork is right.

This article explains the conditions, the documents you need and how to earn trust with buyers abroad. It is general information, not tax advice, so check your own case with your accountant or tax office.

What is an intra-community supply?

An intra-community supply is a sale of goods between businesses in two EU member states, where the goods physically move from one country to the other. The EU's own guidance for companies puts it simply: for goods sent to another EU country, you do not charge VAT if the customer has a valid VAT number.

The VAT is not lost, because the purchase is taxed as an intra-community acquisition in the buyer's country, so the buyer accounts for VAT there. In Germany the same transaction is called an innergemeinschaftliche Lieferung, and you will see that term on many German invoices and in German tax guidance.

Goods versus services

The intra-community supply rules are for goods, while for most business services, such as design work, the EU guidance says the customer pays VAT on the services received at the rate in their country, using the reverse charge procedure. You can read more in our guide to reverse charge VAT in the EU.

Conditions for an intra-community supply without VAT

Since the 2020 "quick fixes" to EU VAT law, the conditions are stricter and more harmonised. In short, you need four things to meet them.

1. A valid VAT number from the buyer

The buyer's VAT number, issued by another member state than the one the goods leave from, is now a substantive condition. The European Commission's explanatory notes say it should constitute an additional substantive condition for the application of the exemption. Check the number in VIES before you invoice. The Commission recommends that you keep track of your validation in case of tax control. Our guide on how to check an EU VAT number walks through it.

2. Proof that the goods left the country

You must be able to show that the goods were transported to the other member state. EU rules set out a presumption of transport based on documents from independent parties. As one law firm summarises the rule, when the seller arranges transport, two documents are required; when the buyer arranges it, three, including a written statement from the buyer that the Commission's notes say is due by the tenth day of the month following the supply.

Typical documents are a signed consignment note, the carrier's invoice or a confirmation of receipt. In Germany, the seller can use a Gelangensbestätigung, a receipt confirmation signed by the buyer, or alternative evidence such as consignment notes when a carrier ships the goods.

3. A correct invoice

The invoice must make clear why no VAT is charged and show both your VAT number and the buyer's. German guidance, for example, requires a note such as steuerfreie innergemeinschaftliche Lieferung plus both VAT numbers.

4. The EC Sales List

Report the sale in your recapitulative statement, often called the EC Sales List. Under the 2020 rules, the exemption can be lost if the seller fails to submit the corresponding recapitulative statement, unless the omission is duly justified and corrected. Deadlines are set nationally; in Germany the Zusammenfassende Meldung is generally due by the 25th day of the month after the supply, with quarterly filing possible for smaller volumes.

Intra-community supply checklist before you invoice

Common mistakes with intra-community supplies

Most problems found in tax audits are not about the rules themselves but about missing evidence. These are the gaps to watch for in your records:

• Checking the VAT number once and never again. Numbers can be deactivated, so check new customers before the first invoice and repeat the check for regular customers from time to time.
• Using the wrong company's number. The VAT number on the invoice should belong to the company that orders and pays, not to a sister company or a carrier.
• Customer collection without paperwork. When the buyer collects the goods with its own truck, you depend on the buyer's documents. Agree before collection which documents they will send and when.
• Delivery to a third country address. If goods go to a different country than the buyer's VAT number suggests, ask your accountant before invoicing, because the treatment may change.
• Late or missing EC Sales Lists. Put the filing date in the same calendar as your VAT return.

Delivery terms and trust when selling abroad

Agree the Incoterm

Agree on an Incoterm so it is clear who pays freight and carries the risk, bearing in mind that many B2B buyers want a delivered price. Under DAP, the seller pays for carriage to the named destination and bears the risk until that point, and the buyer unloads. The Incoterm does not decide the VAT treatment, but the transport documents it produces are part of your proof. For more on the terms, see Incoterms 2020 explained.

Earn trust with buyers abroad

• A VAT number that checks out in VIES and a company registration buyers can look up.
• Certificates the buyer can verify, such as FSC or ISO 14001, with the certificate code.
• Clear quotes in English or the buyer's language, with all costs, the delivery term and the lead time.
• Fast, precise answers, because buyers judge a foreign supplier by the quote.

Finding business buyers in other EU countries

Flobid sends requests from buyers across Europe to suppliers in the matching category who deliver to the buyer's country. You see the summary for free and choose which requests to answer. Suppliers with a VAT-checked or Verified badge show buyers that the basics have been checked. Read how it works for suppliers on the supplier page.

Sources

1. VAT for companies factsheet, Your Europe, European Union
2. Explanatory Notes on the EU VAT changes in respect of call-off stock arrangements, chain transactions and the exemption for intra-Community supplies of goods ("2020 Quick Fixes"), European Commission (2019)
3. Check a VAT number (VIES), Your Europe, European Union
4. What changed in 2020 in VAT on intra-Community transactions, Garrigues (2020)
5. Steuerfreie Warenlieferungen in der EU zwischen Unternehmen, IHK Gießen-Friedberg
6. Incoterms 2020: DPU or DAP?, ICC Academy