Freelancers in the EU often invoice customers in several countries. The VAT treatment depends on who you are and who the customer is, and each treatment has its own wording on the invoice. This is a quick map for a VAT-registered freelancer.
The four situations
- Same country as your customer: charge VAT at your normal rate.
- Business customer in another EU country: usually the reverse charge. No VAT from you, both VAT numbers on the invoice.
- Consumer in another EU country: TrackLode keeps your standard VAT.
- Customer outside the EU: usually outside the scope of EU VAT, with no VAT from you.
Wording for each
Reverse charge: VAT to be accounted for by the customer (Article 196, Council Directive 2006/112/EC). Not subject to VAT in the EU: place of supply is outside the EU (Article 44, Council Directive 2006/112/EC). The customer accounts for any tax due. VAT exempt under the small business scheme. No VAT has been charged.
Small business schemes
Many countries let very small businesses skip VAT. Greece, for example, has an article 39 scheme, and TrackLode prints a bilingual Greek and English legend for it. Other countries get the generic small business legend. Check your own national rules.
Example from an invoice
Item Qty Rate Amount UX audit, 1 Oct - 15 Oct 20 65.00 EUR 1,300.00 EUR Total 1,300.00 EUR Reverse charge: VAT to be accounted for by the customer (Article 196, Council Directive 2006/112/EC).
Let the software suggest it
Set your country and VAT status once in TrackLode, add your client's country and VAT number, and each new invoice starts with the matching treatment and wording. You can always change it. These are sensible defaults, not tax advice, so check with your accountant.