Reverse Charge VAT in the EU: A Plain Guide for B2B Sellers

Reverse charge VAT means that the buyer, not the seller, accounts for the VAT on a purchase. In cross-border business-to-business trade within the EU it is the normal way VAT is handled, so a seller does not have to register for VAT in every customer's country. This guide explains when it applies, what the invoice must show and which checks to make first.

This is general information, not legal or tax advice. Check your own transactions with your accountant or tax adviser.

What is reverse charge VAT?

Normally the seller adds VAT to the invoice, collects it from the customer and pays it to the tax authority. Under the reverse charge, the liability for the VAT moves to the customer. The seller invoices the net amount without VAT, and the buyer calculates the VAT and declares it in their own VAT return.

For a buyer who can recover VAT, the effect is usually neutral. Austria's business service portal explains for goods bought from another EU country that a buyer entitled to deduct input tax can deduct the calculated VAT in the same return, so no money actually changes hands.

The same mechanism under other names

You will meet the mechanism under different names in different languages. In Polish, for example, it is called the mechanizm odwrotnego obciążenia, or odwrotne obciążenie. If your customer writes about it in their own language, it is usually the same principle.

When does reverse charge VAT apply to cross-border services?

For most services between businesses, the general rule is that the service is taxed where the customer is established. The Austrian portal summarises it like this: when the recipient is a business, the service is generally taxed where the recipient's business is established, and the tax liability can shift to the recipient. The customer has to give you their VAT identification number.

In practice this covers many services a print or packaging supplier sells, for example design work, prepress or consulting delivered to a business customer in another EU country.

A simple example: a Swedish design studio creates packaging artwork for a business customer in Denmark. The studio checks the Danish VAT number, sends an invoice for the net fee with no Swedish VAT and adds the required wording. The Danish customer then calculates Danish VAT on the fee in its own return and, if it has full deduction rights, deducts the same amount. The studio reports the sale in its EC Sales List. Nobody has to register for VAT in the other country, and nobody pays VAT twice.

Exceptions to the general rule

Some services follow their own place-of-supply rules, so the customer may not be liable in the usual way. The exceptions listed by the Austrian portal include:

• services connected with property, such as work on a building;
• passenger transport;
• admission to events, such as cultural, sports or entertainment events, for business customers;
• several services to private customers, such as electronic and telecommunication services.

Check the service type before you invoice, especially for anything carried out at a trade fair venue or on a customer's premises.

Reverse charge VAT on goods: intra-community supplies

Goods sold to a VAT-registered business and transported to another member state follow a parallel system. The seller makes an exempt intra-community supply, and the buyer declares an intra-community acquisition at home. In the Austrian example, a German wholesaler supplies an Austrian retailer: Germany does not tax the delivery, and Austria charges acquisition tax of 20 per cent, which the retailer can deduct if entitled.

Since 1 January 2020 two conditions are central to the exemption. As Grant Thornton Austria summarises, the customer must give you a valid VAT number issued by another member state, and you must file a correct EC Sales List for the period. Read more about the goods side in selling to business buyers in other EU countries.

What must a reverse charge VAT invoice show?

The EU VAT Directive sets out the invoice details in Article 226. For cross-border B2B sales, these points matter most:

• Your VAT number under which you made the supply.
• The customer's VAT number under which they received the supply.
• No VAT amount on the invoice.
• The wording "Reverse charge" where the customer is liable for the VAT. The Directive requires the mention "Reverse charge" in that case.
• An exemption reference for intra-community supplies of goods, pointing to the applicable provision or stating that the supply is exempt.
• The usual details: date, invoice number, description, quantity, unit price and total.

Member states also set invoicing deadlines, and Austria, for example, requires invoices for cross-border services where the customer is liable to be issued by the 15th day of the following month.

Check the customer's VAT number first

Before you invoice without VAT, check the customer's number in VIES. The EU's guidance recommends keeping a record of your validation checks in case of a tax inspection. Our guide how to check an EU VAT number walks through it step by step.

Report the sale in your EC Sales List

Cross-border B2B services under the general rule and intra-community supplies of goods are reported in the EC Sales List, also called the recapitulative statement. See the EC Sales List explained for what goes in it.

Domestic reverse charge

Some countries also use the reverse charge for certain sales inside the country. These rules are national and separate from the cross-border rule described above. They can also change: in Poland, for example, the former domestic reverse charge on certain goods and construction services has largely been replaced by split payment. Always check the current rules in the country concerned.

Common reverse charge VAT mistakes

• Charging local VAT on a cross-border B2B service that falls under the general rule.
• Leaving out the "Reverse charge" wording or the customer's VAT number.
• Invoicing without VAT to a customer whose number is not valid for intra-EU trade.
• Invoicing private customers without VAT, even though the cross-border mechanism is meant for business customers.
• Forgetting to report the sale in the EC Sales List.

Reverse charge VAT and supplier checks on Flobid

When you buy across borders, a valid VAT number is also a first sign that a supplier is a real, registered business. Flobid checks suppliers' VAT numbers in VIES and compares the registered name with the company name. Suppliers whose number is valid and whose name matches carry the VAT-checked badge; Verified suppliers have also been checked in the national company register and had their documents reviewed. See what each badge means on the verification page.

Sources

1. Council Directive 2006/112/EC on the common system of value added tax, Article 226, legislation.gov.uk
2. Cross-border services, USP.gv.at, Austrian Business Service Portal (2026)
3. Intra-Community acquisitions, USP.gv.at, Austrian Business Service Portal
4. Additional requirements for the VAT exemption of intra-Community supplies of goods, Grant Thornton Austria (2020)
5. Check a VAT number (VIES), Your Europe, European Union
6. Czym jest reverse charge VAT i jakie ma znaczenie dla przedsiębiorców?, Fakturownia (2026)