EUROPEAN UNION CJEU strictly interprets invoicing requirements for application of simplified trian

Country specific sequences are only for the 28 member states of the EU. Invoices with customers in non-EU countries will increment the site-level sequence. If you are selling digital services to non-business customers in the EU, VAT regulation requires that you collect two pieces of non-conflicting evidence of what country the customer is located in. To require two pieces of location evidence from non-business customers, use Recurly’s Tax Location Validation feature. Digital services like telecommunications, broadcasting and electronic services need to be identified as digital at the product level.

The Portuguese tax authority have been moving towards the mandatory use of a QR code and unique document code on invoices since at least 2020. While optional use of these has been recommended for some time, the mandate has been postponed several times. The mandatory use of a QR code on paper or signed PDF invoices became mandatory in January 2022. You may have to prove to the Tax Administration of a member state that you have verified the VAT number while collecting it from the customer.

The importance of the invoice for VAT purpose

Real-Invoice Requirements Eu Vat Notification Get notified whenever estimates and invoices are opened or payouts proceeded. For more details, you can refer to this list of VAT countries and their individual VAT rates compiled by the United States Council for International Business. The European Commission has, at this stage, chosen not to propose regulation regarding the transmission channel of the reported data to the tax authorities. This regulatory change proposal will still need formal adoption by the Council of the European Union and the European Parliament under ordinary legislative procedures before it can come into force. In tax matters such as these, the process requires unanimity among all Member States. Member States which have already implemented an e-Reporting system for these transactions will have to adapt them to ensure harmonization with the centralized reporting system by 2028 at the latest.

• Additional Tax Code fields are found next to the add-ons on that page and on the Create a Charge page.
• This number will appear on all invoices and should match the country in our company address, unless you are located outside of the EU.
• The prescribed data for this reporting will need to be transmitted electronically, on a transaction-by-transaction basis, within two working days from the issuance date of the invoice.
• Recurly currently stores one merchant address per site, collected on the Site Settings page.

This will be a structured e-invoice format (XML; UBL; PDF/A3 etc) and not PDF’s. Before each contract/order the provider must submit a pro-forma invoice to the Council of Europe, this pro-forma invoice will be used to obtain a VAT exemption certificate from the French tax authorities. The Council of Europe shall provide a VAT exemption certificate to the provider with each contract/order.

My business is not based in the EU. Do I have to pay this VAT?

We do not recommend storing IP address in Billing Info as that is not the most accurate indication of location. We do use IP address for location evidence for digital services, but that is as a secondary piece of evidence. The primary address evidence is always the billing address or the account address . The specific objectives of the ViDA initiative include improving tax reporting and unlocking the opportunities provided by digitalization.

Here’s a detailed guide to applying for VAT from a non-EU country. This proposed change would effectively signal the end of the “clearance model” in the EU such as has been implemented in Italy and is widely used in Latin America. Starting in 2025 and by 2030, the various requirements related to intra-EU digital reporting, single VAT registration, and new rules for platforms will gradually come into effect.

Submit VAT Returns Quarterly

Exempt transactions – a reference to the appropriate legislation exempting it, or any other reference indicating it is exempt .

Every https://quick-bookkeeping.net/ selling digital goods to a customer in the EU needs to be on their game when it comes to VAT rules. It doesn’t matter if your business is actually in the EU or not. For B2B sales, the place of supply is where the customer is based. For B2C sales, the place of supply is where the supplier is based. After Brexit, businesses based in Great Britain can no longer apply the reverse charge to EU sales. However, businesses based in Northern Ireland can still apply the reverse charge as normal because they are still within the EU VAT area.

What does the future of VAT in the Digital Age look like?

Businesses will be allowed to issue electronic invoices according to the European e-invoicing standard for all transactions, and the requirement of customer acceptance for e-invoicing will be dropped. This next invoice is an example of a UK freelancer selling services to an EU business after Brexit. The “general” place of supply rules and the reverse charge apply to this transaction. For example, if you are an England-based freelance copywriter who provides services to a German company, the place of supply is Germany. You should include the German company’s VAT Registration Number on your invoice and should not apply VAT. The German business will still account for the VAT on their VAT Return under the reverse charge.