Vatx — EU and cross-border value added tax for small | vatx.org

Vatx — EU and cross-border value added tax for small | vatx.org

Reverse Charge and VIES Validation

On a cross-border sale to a VAT-registered business, the seller does not charge VAT at all — the customer accounts for it, and VIES is the check that makes it legal.

The reverse charge is the default treatment for intra-community supplies between businesses. The seller issues an invoice at 0%, notes the customer's VAT number and country, and adds a statement that the reverse charge applies. From that moment the tax is the customer's affair: they account for it in their own member state through their own return.

No threshold softens the rule. Whether the invoice is for €50 or €50,000, a valid business customer takes the tax home with them. This is the opposite of the consumer regime, where the €10,000 OSS line decides.

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VIES — the VAT Information Exchange System — is the legal validation step. Each member state has its own accepted format: Germany nine digits, France two characters plus nine digits, Italy eleven digits, Spain nine characters, Poland ten digits.

When VIES rejects a number, the usual cause is mundane: a company registration number was supplied instead of a VAT number. The remedy is to ask the customer for their VAT number in the national format and validate again — not to invoice at 0% on faith.

If the number never validates, the supply is not a reverse-charge sale. Home-country VAT may be due, and the thresholds page on this site shows what registration would then involve.

  • Invoice at 0% with no VAT added
  • Customer's VAT number and country on the invoice
  • A note that the reverse charge applies
  • VIES validation result kept with the invoice
  • Sale reported as an intra-community supply in the seller's return

Further reading