Global Cross-Border Invoice & VAT / GST Reverse Charge Guide
B2B Export Exemptions, EU Reverse Charge, and Zero-Rated Invoicing
Invoicing international B2B clients requires compliance with cross-border VAT and GST regulations. In the European Union, services rendered to non-resident corporate entities fall under the Reverse Charge Mechanism — the invoice issuer charges 0% VAT and annotates the invoice with: 'VAT reverse-charged pursuant to EU Directive 2006/112/EC'.
Outside the EU, most jurisdictions apply export exemptions for services delivered to overseas businesses: UK zero-rating under VATA 1994, Australian GST-free exports, and Turkish 0% KDV ihracat istisnası. Our VAT calculator automatically applies the correct regime based on seller country, buyer country, and transaction type (B2B vs B2C), producing a fully compliant invoice breakdown.
Under Article 44 and Article 196 of EU VAT Directive 2006/112/EC, the place of supply for B2B services is where the business customer is established; the buyer self-accounts for VAT via Reverse Charge.
2026 Global VAT / GST Rates & Cross-Border B2B Invoicing Matrix
| Supplier Region | Standard Domestic VAT/GST | Invoicing EU B2B Client (Valid VIES) | Invoicing US / UK / Non-EU B2B | Mandatory Invoice Legal Annotation |
|---|---|---|---|---|
| 🇪🇺 EU Member State (e.g., DE 19%, ES 21%) | 19% – 27% | 0% (Intra-EU Reverse Charge) | 0% (Place of Supply Outside EU) | 'Reverse Charge — Art. 44 & 196 EU VAT Directive 2006/112/EC' |
| 🇬🇧 United Kingdom | 20% (Standard Rate) | 0% (Outside Scope of UK VAT) | 0% (Outside Scope of UK VAT) | 'Outside the scope of UK VAT — B2B Place of Supply Rules' |
| 🇹🇷 Turkey (Hizmet İhracatı) | 20% (Genel KDV) | 0% (KDV Kanunu Md. 11/1-a) | 0% (KDV Kanunu Md. 11/1-a) | 'Hizmet İhracatı kapsamında KDV'den istisnadır (3065 S.K. Md. 11/1-a)' |
| 🇦🇺 Australia / 🇨🇦 Canada | 10% GST / 5%–15% GST-HST | 0% (GST-Free Export) | 0% (Zero-Rated Export) | 'Zero-rated export of services to non-resident recipient' |
| 🇺🇸 United States | 0% Federal VAT (State Sales Tax) | 0% Export Service | 0% Out-of-State B2B Service | No federal VAT; state SaaS sales tax applies only if economic nexus met |
How the EU VAT Reverse Charge Mechanism Works (VIES Validation & EC Sales List)
When a business or freelancer established in one EU country (for example, Spain or Germany) supplies consulting, software engineering, or marketing services to a VAT-registered company in another EU member state (for example, Ireland or the Netherlands), you do not charge domestic VAT. Instead, you must: (1) verify the client's EU VAT identification number in the European Commission's VIES database and save the consultation timestamp, (2) display both your VAT number and the buyer's VAT number on the invoice, (3) add the mandatory Reverse Charge legal note, and (4) report the transaction in your periodic Recapitulative Statement (EC Sales List / Modelo 349 in Spain / Zusammenfassende Meldung in Germany).
Invoicing B2B Clients in the US, UK, Switzerland, and UAE (Outside Scope / Export Exemption)
When providing B2B digital or professional services to corporate clients outside your domestic tax jurisdiction (such as a European, British, or Turkish contractor invoicing a Delaware C-Corp or London Ltd), the place of supply shifts to the customer's country under international destination-principle rules. The invoice is issued with 0% VAT while retaining your full right to deduct input VAT paid on your own business expenses (such as laptops, coworking, and accounting fees).
B2B vs. B2C Digital Services: The EU One-Stop-Shop (OSS) Distinction
Zero-rating applies strictly when your customer is a taxable business entity (B2B) or located outside the scope rules. If you sell automated SaaS subscriptions, e-books, or digital courses directly to private consumers (B2C) in the EU above the €10,000 cross-border threshold, you must charge the consumer's local country VAT rate and remit it through the EU One-Stop-Shop (OSS) portal.
Frequently Asked Questions & Statutory Rules
Do I charge VAT when invoicing a foreign B2B client?
Generally no. Cross-border B2B service exports are zero-rated under export exemptions or EU Reverse Charge, meaning the buyer accounts for any local VAT themselves.
What if my US LLC client does not have a VAT number?
US companies do not have VAT numbers because the United States has no federal VAT system. To prove your US client is a business (B2B) during a tax audit, keep their Employer Identification Number (EIN / Form W-9), Certificate of Incorporation, and signed B2B contract on file.
Can I reclaim input VAT on my business purchases if 100% of my invoices are 0% export/reverse-charge?
Yes! Cross-border B2B service exports and EU Reverse Charge supplies are 'taxable supplies with right of deduction' (unlike exempt healthcare or financial services). Many exporters receive net quarterly or annual VAT refunds from their tax office.
How do I calculate the net price from a VAT-inclusive gross amount?
Divide the gross amount by (1 + VAT Rate). For example, to extract 20% VAT from a €1,200 gross invoice, divide €1,200 by 1.20 = €1,000 net + €200 VAT (never multiply €1,200 by 20%, which would wrongly give €240).