Intra-community service

Intra-Community service

An intra-Community service (supply) exists when the provider of the service and the customer receiving the service are each established in a different EU country. The place of establishment of the recipient of the service serves as the criterion to determine where (and whether) VAT is due. The supply of a service between VAT-registered parties (B2B) also differs from the supply to private individuals who are not liable for VAT (B2C).

Intra-Community service B2B

No VAT is charged on an invoice between VAT-registered parties each established in a different EU country. The recipient of the service must pay the VAT via his return. The service provider states ‘VAT reverse charged’ on the invoice. 

Essential condition: the customer receiving the service must have a valid VAT number in his home country. Checking its validity is the responsibility of the seller-supplier, in other words you. VAT numbers from another member state are easy to check via the European VIES database, which is integrated into onFact. This allows you to check with one click whether the VAT number provided is valid for intra-Community trade. It is important to check this in advance because intra-Community services must be included in your intra-Community listing wíth the VAT number of the customer-recipient. Be careful: if you as supplier wrongly did not charge VAT to the foreign customer, for example because the VAT number is incorrect or because you cannot prove that the goods have left the country, you will have to pay the VAT that was wrongly not charged.

These services go in a separate section of your periodic VAT return (intra-Community services). It's best to consult your accountant about the intra-Community transactions that you or your company carry out, because applying the VAT rules incorrectly means you will have to cough up the VAT that was wrongly not charged - with a serious risk of fines.

Intra-Community service B2C

If you supply a service to non-taxable persons (private individuals), you as service provider must always charge VAT to the customer in the other EU member state. A big difference with the intra-Community supply of goods to persons not liable for VAT: these are exempt from VAT because that tax must be paid by the customer in his or her country.

Of course there are also exceptions to this VAT rule, relating among other things to real estate. Here too, consult your accountant about the intra-Community transactions: applying the VAT rules incorrectly means a serious risk of fines.