Free tool

Reverse-charge VAT checker

Answer four questions about a cross-border supply and see whether to charge VAT, reverse-charge it, or zero-rate it, with the wording for the invoice.

What are you supplying?
Where is the customer?
Customer type
Valid EU VAT number?

Reverse charge applies

Cross-border B2B services to a VAT-registered business in another EU country. The customer accounts for the VAT under the reverse-charge mechanism, so you do not charge Cyprus VAT.

Reverse charge, Article 196 of Council Directive 2006/112/EC.

This tool covers the most common scenarios and is for general guidance only, not tax advice. Confirm the treatment for your specific supply, and verify EU VAT numbers on VIES.

Twenty-four combinations

Four questions, and every answer they can produce.

There are twenty-four ways to answer the four questions above. They collapse into eight cases and four treatments, and all of them are on this page. Nothing below is a selected example.

Customer is inSupplyCustomerVAT numberTreatmentCovers
CyprusAnyAnyAnyCharge Cyprus VAT8
Another EU countryServicesBusinessYesReverse charge applies1
Another EU countryGoodsBusinessYesReverse charge applies1
Another EU countryAnyBusinessNoCharge Cyprus VAT2
Another EU countryAnyConsumerAnyCharge Cyprus VAT4
Outside the EUGoodsAnyAnyZero-rated export4
Outside the EUServicesBusinessAnyOutside the scope of Cyprus VAT2
Outside the EUServicesConsumerAnyCharge Cyprus VAT2
Every combination the four questions can produce24

The same deal, answered two ways

Two of those rows differ by one thing, and it is not the transaction. Services to a business in another EU country are the customer’s VAT to account for when they have a valid VAT number, and yours to charge when they do not. The supply is identical. The difference is a registration, which is a thing to check rather than assume.

Eight rows, and between them they cover all twenty-four ways of answering the four questions. There is no case in the tool above that is not one of these.

Place of supply decides who charges VAT

The reverse charge exists because cross-border VAT follows the place of supply, not where you are based. For most B2B services and intra-EU goods, the place of supply is the customer's country, so the customer accounts for the VAT instead of you. You issue the invoice without Cyprus VAT and add a short note pointing to the reverse charge. Get the place of supply wrong and you either charge VAT you should not, or miss VAT you owe.

The wording to put on the invoice

When the reverse charge applies, the invoice has to say so. For B2B services to another EU country, reference Article 196 of the VAT Directive. For an intra-EU supply of goods, the customer's VAT number goes on the invoice and the supply is zero-rated. For goods leaving the EU, mark them as a zero-rated export and keep proof the goods left. The checker shows the exact line for each case.

Check the VAT number before you zero-rate

Reverse charge and intra-EU zero-rating depend on the customer being a VAT-registered business in another EU country. Verify the number on the EU VIES system and keep the result. If the number is invalid, the supply is treated as B2C and you charge Cyprus VAT. Zero-rating a supply that should have carried VAT leaves you owing the VAT, plus penalties.

Common mistakes

Three trip up most people. Treating a consumer as a business and skipping the VAT. Assuming every EU sale reverse-charges, when B2C distance sales may fall under the One Stop Shop instead. And forgetting that services to a non-EU business are usually outside the scope of EU VAT, not zero-rated, which changes what you report.

  • Describe the supply

    Pick whether you are selling services or goods, and where your customer is based.

  • Tell us the customer

    Choose business or consumer, and for EU customers whether they have a valid VAT number.

  • Get the treatment

    See whether to charge VAT, reverse-charge, or zero-rate, plus the wording for the invoice.

For many cross-border B2B supplies within the EU the supplier does not charge VAT; instead the customer accounts for it in their own country. The supplier adds a note to the invoice referencing the reverse charge.
For B2B reverse charge on services, or an intra-Community supply of goods, the customer must be a VAT-registered business in another EU country. Verify the number on the EU VIES system and keep the evidence.
Sales to consumers are different. Distance sales of goods and certain digital services may fall under the One Stop Shop (OSS) once you pass the EU-wide threshold. This tool flags when to charge VAT; check OSS for your volumes.
Both, but differently. Cross-border B2B services to another EU country use the reverse charge. Goods sent to a VAT-registered business in another EU country are an intra-Community supply: zero-rated for you, with the customer accounting for the acquisition VAT.
Then you cannot treat it as a B2B reverse charge or an intra-EU zero-rated supply. Charge Cyprus VAT, and for distance sales to consumers check whether the One Stop Shop applies.

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