EU VAT for small businesses: standard, reverse charge and zero-rated
The three VAT treatments every EU small business meets — standard, reverse charge and zero-rated — explained in plain language: when each applies, what goes on the invoice, and what lands in your VAT return.
If you sell from one EU country to customers at home, across the EU and beyond, three VAT treatments cover almost everything you will invoice. Getting them right matters twice: on the document your customer receives, and in the VAT return you file.
Standard: domestic sales
Selling to a customer in your own country? Charge your national VAT rate on each line. The VAT you charge is output VAT; you owe it to the tax office, minus the input VAT on things you bought. This is the default for every domestic sale, business or consumer.
Reverse charge: B2B across EU borders
Selling to a VAT-registered business in another EU country? You charge no VAT. Instead, the customer self-accounts for it in their own country — the liability “reverses” to them. Your invoice must show both VAT numbers and state that the reverse charge applies; your VAT return discloses these sales in their own box. The same happens in mirror when an EU supplier reverse-charges you: you self-account output and input VAT, which usually nets to zero but must still be disclosed.
Zero-rated: exports outside the EU
Selling to a customer outside the EU? The sale is typically zero-rated: 0% VAT on the invoice, but still a VAT-relevant sale that appears in your return (and you keep full input-VAT recovery — unlike exempt supplies, which are a different thing).
How Logario handles this
Logario derives the treatment from each customer: same country → standard; EU business with a VAT number → reverse charge; outside the EU → zero-rated. Every invoice line carries its VAT rate, the PDF shows the right disclosures, and the VAT summary report separates output VAT by rate, reverse-charge self-accounting and the sales bases per treatment — on an accrual or cash basis. You can override the treatment per document when an edge case calls for it.
Common questions
Do I charge VAT to an EU customer without a VAT number?
Usually yes — an EU consumer (or a business that cannot give you a VAT number) is charged your standard domestic VAT, not reverse-charged.
What must a reverse-charge invoice show?
Both parties’ VAT numbers and a note that the reverse charge applies (no VAT amount is charged). Logario adds the disclosure automatically.
Is zero-rated the same as exempt?
No. Zero-rated sales charge 0% but keep your right to reclaim input VAT; exempt supplies are outside the VAT system and can restrict recovery.