Guides · Updated 6 October 2026

The reverse charge explained: EU and UK B2B sales

When you invoice without VAT and the customer accounts for it instead: services, goods, the conditions, and what the invoice must say.

What the reverse charge is

Normally the seller charges VAT and pays it to their tax authority. Under the reverse charge, the seller invoices without VAT and the business customer accounts for the VAT themselves, in their own country's VAT return. For a customer who can recover VAT, the amount they declare and the amount they deduct usually cancel out.

It exists so that a business selling to customers across the EU doesn't have to register for VAT in every one of their countries.

Services to EU businesses

For most services between businesses, the place of supply is where the customer is based (Article 44 of the EU VAT Directive), and the customer accounts for the VAT under the reverse charge (Article 196). So a French consultant invoicing a German company charges no French VAT, and the German company declares German VAT on it.

There are exceptions where a different rule decides the place of supply, such as services connected with land and buildings, passenger transport, admission to events, and restaurant services. Those can mean charging local VAT instead.

Goods sent to EU businesses

Goods sold to a VAT-registered business in another member state and transported there are exempt from VAT in the seller's country as an intra-Community supply (Article 138). The customer declares an intra-Community acquisition and accounts for VAT in their country. This works like a reverse charge and is often called one, although the invoice wording differs.

The conditions

The customer is a business with a valid VAT number from another member state, checked in VIES at the time of the sale. How to check it properly.
For goods, they actually leave your country, with transport documents to prove it.
You report the sale in your VAT return and in the recapitulative statement (EC Sales List) your country requires.

What the invoice must say

Your VAT number and the customer's VAT number.
No VAT charged, and the reason. For services, the words "Reverse charge" (Article 226(11a)); for goods, a reference to the intra-Community exemption, e.g. "Exempt intra-Community supply, Article 138 of Directive 2006/112/EC".
Everything else a normal VAT invoice needs: date, number, description, quantities and amounts.

Sales between the UK and the EU

Since Brexit, sales between Great Britain and the EU aren't intra-Community: goods are exports and imports, handled through customs. For most business-to-business services, the rule is similar to the EU one: the service is generally taxed where the business customer is, and the customer accounts for any VAT due there. Northern Ireland still follows EU rules for goods.

Domestic reverse charges

Some countries also use a reverse charge between businesses inside the country, for sectors prone to fraud, such as construction, scrap metal, mobile phones or emissions allowances. Those rules are national and vary; this guide is about cross-border sales.

Check whether the reverse charge applies

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This guide is general information, not tax or legal advice. Rules and their application differ by country and by transaction; check with an adviser for your situation.