Invoicing abroad: reverse-charged VAT explained

A client in Germany or outside the EU? Then you usually charge no Dutch VAT, but that does not mean there is nothing to do. Here is how to invoice abroad correctly, with VAT reverse-charged and the right filings.

Business client in the EU: reverse-charge VAT

If you provide a service to an entrepreneur in another EU country, you reverse-charge the VAT to your client. You put no VAT on the invoice; your client declares the VAT in their own country. On the invoice you state:

• your client's VAT identification number;
• the wording "btw verlegd" (VAT reverse-charged);
• all the usual invoice requirements besides.

Always check your client's VAT number via the European VIES system. If it is invalid you may not reverse-charge and you end up owing the VAT yourself.

Two extra obligations for EU services

1. ICP declaration. Alongside your regular VAT return you file a declaration of intra-Community services (ICP), listing the reverse-charged revenue per client. The amounts in your ICP declaration and your VAT return (box 3b) must match.
2. The right box. Revenue with reverse-charged VAT to the EU goes in box 3b of your return.

Client outside the EU

If you supply a client outside the EU, your service usually falls outside Dutch VAT. You invoice without VAT and note that the service is performed outside the EU. This revenue goes in box 3a. No ICP declaration is needed here, as that only applies within the EU.

Note: this is about services to businesses

The main rule above applies to services (b2b), which is what most freelancers deal with. For consumer clients abroad and for trade in goods, different rules apply; digital services to consumers in the EU, for example, often run through the One Stop Shop. In doubt about such a situation, run it by your accountant.

Keep it organised

Foreign revenue calls for a clean split in your administration so your return and ICP declaration match. Finq recognises reverse-charged and foreign revenue and puts it in the right boxes of your VAT return automatically, so all that is left is copying the numbers. See how the VAT return works.