Invoicing how-to
Reverse charge invoices in the EU: when and how
When do you issue a reverse-charge invoice in the EU, and what must it say? A practical guide to the reverse-charge mechanism under Article 196 of the VAT Directive for cross-border B2B services, with the wording your invoice needs.
Last reviewed 2 June 2026
If you are a freelancer or small business selling services to a business in another EU country, you have probably been told to "use reverse charge" and leave VAT off the invoice. This guide explains exactly when that is correct and what the invoice must say.
This is general information, not tax advice. When in doubt, check with your accountant, the right treatment depends on your VAT registration and the nature of the supply.
What the reverse charge is
Reverse charge is a VAT simplification under Article 196 of the EU VAT Directive (2006/112/EC). Normally the supplier charges VAT and pays it to their tax authority. Under reverse charge, that responsibility shifts to the buyer: you invoice without VAT, and your business customer accounts for the VAT in their own country, usually reclaiming it on the same return.
It exists so that you do not have to register for VAT in every country where you have business customers.
When it applies
For cross-border B2B services, reverse charge typically applies when three conditions are all met: the transaction is business-to-business; the supplier and the customer are in different EU countries; and the customer has a valid EU VAT identification number.
If your customer is a private individual (B2C), or is in the same country as you, reverse charge does not apply and you charge VAT in the normal way. Always verify the customer's VAT number (for example via the EU VIES system) before treating a sale as reverse charge.
What the invoice must show
A reverse-charge invoice shows 0% VAT and must include both VAT identification numbers (yours and the customer's) and an explicit statement that the reverse charge applies, for example "Reverse charge — VAT to be accounted for by the recipient (Article 196 of Directive 2006/112/EC)". Many countries expect this note in their local language.
euinvoice detects reverse charge automatically: when you enter a customer in a different EU country with a valid VAT ID, it switches the invoice to reverse charge and inserts the legally required statement in the right language for you.
Frequently asked questions
Do I charge VAT on a reverse-charge invoice?
No. You issue the invoice at 0% VAT and your business customer accounts for the VAT in their own country. The invoice must state that the reverse charge applies and show both parties' VAT numbers.
When does reverse charge apply to EU services?
Typically when the sale is B2B, the supplier and customer are in different EU countries, and the customer has a valid EU VAT ID. If the customer is a consumer, or is in your own country, you charge VAT normally.
What wording does a reverse-charge invoice need?
An explicit statement that the reverse charge applies, referencing Article 196 of Directive 2006/112/EC, plus both VAT identification numbers. euinvoice inserts the correct statement automatically in the relevant language.
This guide is general information, not legal or tax advice. E-invoicing rules and dates change; always confirm the current position with the official source below or a qualified adviser before acting.
Create a reverse-charge invoice now
euinvoice detects reverse charge automatically and adds the correct legal statement and VAT numbers. Free, no account needed.