Check your transaction
This tool provides general guidance based on standard EU VAT rules. It does not constitute tax or legal advice. Consult a tax advisor for your specific situation.
How it works
Enter details
Select the seller and buyer countries, whether the customer is a business or consumer, and the type of transaction.
Get instant result
The tool evaluates EU VAT rules and determines whether reverse charge applies to your specific transaction.
Copy the invoice note
If reverse charge applies, copy the legally required invoice note directly into your invoice.
Frequently asked questions
What is the reverse charge mechanism?
The reverse charge mechanism shifts VAT liability from the seller to the buyer. Instead of the seller charging VAT, the buyer accounts for VAT in their own tax return. It applies mainly to cross-border B2B services within the EU.
Do I need the buyer's VAT ID for reverse charge?
Yes, for EU cross-border B2B transactions (both services and goods), the buyer must have a valid VAT ID. Without it, you cannot apply reverse charge and must charge VAT at your domestic rate.
What is the difference between reverse charge and intra-community supply?
Reverse charge applies to cross-border B2B services. Intra-community supply applies to cross-border B2B goods. Both result in 0% VAT on the invoice, but the legal basis and reporting requirements differ.
Does reverse charge apply to B2C transactions?
No. Reverse charge only applies to B2B transactions. For B2C sales to other EU countries, the seller generally charges VAT at the destination country's rate, often using the One-Stop Shop (OSS) system.
What happens if I apply reverse charge incorrectly?
If you fail to charge VAT when required, you may be liable for the VAT amount plus penalties. If you charge VAT when reverse charge applies, the buyer cannot recover it through the normal mechanism. Always verify the buyer's VAT ID before applying reverse charge.
Create reverse charge invoices automatically
Billstride applies the correct tax rules based on your client's country and VAT ID. No manual research needed.
- Automatic reverse charge detection
- Invoice notes added automatically
- EU VAT ID validation built in
- ZUGFeRD and XRechnung compliant