EU VAT.
How EU VAT works for sellers in the EU, how to set it up in InvoiceScript, and what the product does and does not do for you.
EU VAT for Sellers in the EU
For: business owners registered for VAT in an EU member state. Covers: standard domestic VAT invoicing and the setup in InvoiceScript.
Who this applies to
You are a business registered for VAT in an EU country. You sell goods or services to customers within your own country and to customers in other EU countries. You charge VAT on domestic sales at your country's standard rate.
What the rule is
When you sell to a domestic customer (same EU country), you charge VAT at the applicable rate and include it on the invoice. You remit the collected VAT to your tax authority in your periodic VAT return.
Standard VAT rates in common countries:
| Country | Standard | Reduced |
|---|---|---|
| Netherlands | 21% | 9% |
| Germany | 19% | 7% |
| France | 20% | 5.5% / 10% |
| Belgium | 21% | 6% / 12% |
| Spain | 21% | 10% |
| Italy | 22% | 4% / 5% / 10% |
How to set it up in InvoiceScript
-
Go to Settings > Invoicing and create your tax rates. For a Dutch business:
- BTW 21% (rate: 21, category: S, default: yes)
- BTW 9% (rate: 9, category: S)
- BTW 0% (rate: 0, category: Z)
-
Set your VAT number in Settings > Company > Tax registration.
-
When creating invoices, select the correct tax rate per line item. Most lines use your default rate. Use the reduced rate for eligible goods or services.
Worked example
Mira Holst at Northwind Studio (Amsterdam, NL, VAT number NL123456789B01) invoices Acme Hardware (Rotterdam, NL) for logo design:
| Description | Qty | Unit price | Tax rate | Subtotal | Tax | Total |
|---|---|---|---|---|---|---|
| Logo design | 1 | €2,500.00 | BTW 21% | €2,500.00 | €525.00 | €3,025.00 |
The invoice shows:
- Northwind Studio's VAT number
- Acme Hardware's details
- Tax breakdown: BTW 21% on €2,500.00 = €525.00
- Total: €3,025.00
This is a domestic B2B sale. Both parties are in the Netherlands. Mira charges BTW 21% and includes it in her next VAT return.
Cross-border sales
When you sell to a business in another EU country, different rules may apply. See Reverse Charge for B2B cross-border sales within the EU.
When you sell to a consumer (B2C) in another EU country, OSS (One-Stop Shop) rules may apply. InvoiceScript does not automate OSS reporting. Talk to your accountant.
What InvoiceScript does not do
InvoiceScript does not validate VAT numbers against the VIES database. It does not determine which VAT rate applies to a specific product or service. It does not file VAT returns or calculate your VAT liability.
You set the correct rate. Your accountant handles the return.
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