Invoicing across borders can feel complicated, but once you understand how VAT place‑of‑supply rules work, everything becomes predictable. Whether you sell services or goods, the structure of your invoice depends on who your client is and where they are located.
This guide breaks down the three most common scenarios:
- B2B inside the EU
- B2C inside the EU
- Clients outside the EU (B2B or B2C)
Let’s go step by step.
B2B Inside the EU: When Your Client Has a Valid EU VAT Number
For business‑to‑business transactions within the European Union, the rule is simple:
If the client has a valid EU VAT number, you do NOT charge VAT.
This is because the transaction falls under the reverse charge mechanism. The VAT is declared by the client in their own country.
What your invoice must include
- Your business details
- Client’s business details
- Client’s EU VAT number (mandatory)
- Description of the service or goods
- Price (VAT 0%)
- Mandatory legal text, such as: “Not subject to VAT according to EU place‑of‑supply rules. Reverse charge applies.”
You must also:
- Verify the client’s VAT number in VIES
- Report the transaction in your EC Sales List / Modelo 349 (Spain)
B2C Inside the EU: When Your Client Is a Private Individual
For private customers inside the EU, the rules change completely.
Services
Most services follow the rule:
VAT is charged in the country where the supplier is established.
So if you are based in Spain, you charge Spanish VAT to all EU private clients.
Goods
If you sell goods to EU consumers, VAT depends on:
- Distance‑selling thresholds
- Whether you use the OSS (One‑Stop Shop) system
- The country of delivery
What your invoice must include
- Your business details
- Client’s name and address
- Price + VAT of your country (unless OSS applies)
- Standard invoice wording (no reverse charge)
B2B or B2C Outside the EU: Clients in the UK, USA, Latin America, Asia…
When your client is outside the European Union, VAT rules become much simpler.
Services
Most services provided to non‑EU clients are:
Not subject to EU VAT.
You invoice VAT 0%, and you do not charge any tax.
Goods
Goods exported outside the EU are:
Exempt from VAT as exports, provided you keep proof of export.
What your invoice must include
- Your business details
- Client’s details
- Price (VAT 0%)
- Mandatory legal text, such as: “Export of services/goods outside the EU. Not subject to VAT.”
Summary Table
| Scenario | VAT Charged? | Mandatory Text | Client VAT Number Needed? |
|---|---|---|---|
| B2B EU | No | Reverse charge | Yes |
| B2C EU | Yes (supplier’s country) | Standard VAT wording | No |
| Outside EU | No | Export / Not subject to VAT | No |
Final Thoughts
Once you understand the logic behind VAT place‑of‑supply rules, invoicing becomes straightforward. The key is always to identify:
- Is the client a business or a private person?
- Where is the client located?
- Are you selling goods or services?
From there, the VAT treatment follows automatically.