EU B2B VAT in WooCommerce: VIES checks, reverse charge and invoice wording

When a business customer from another EU country orders from your WooCommerce shop and enters a VAT number, you are often expected to remove VAT from the order. Whether you may do so depends on a few conditions, and the invoice has to say why VAT is not charged.

This article covers the common case: a VAT-registered shop in one EU member state selling to a VAT-registered business in another member state. It explains the two different legal bases for 0% VAT, how VIES checks work, what the invoice must contain, and what records to keep.

Goods and services follow different rules

There is no single “B2B 0% VAT” rule. The legal basis depends on what you sell.

Goods: exempt intra-Community supply (Article 138)

When you sell goods that are dispatched or transported from your country to another member state, the sale can be exempt from VAT under Article 138(1) of the VAT Directive. Since 1 January 2020, after the “quick fixes” in Directive (EU) 2018/1910, the conditions include:

• the goods are actually transported to another member state, by you, the customer or someone on your behalf,
• the customer is a taxable person (or a non-taxable legal person acting as such) identified for VAT in a member state other than the one where transport begins,
• the customer has given you that VAT identification number.

Article 138(1a) adds a further condition: the exemption does not apply if you have not filed the recapitulative statement (often called the EC Sales List) for the supply correctly, unless you can justify the shortcoming to the tax authority. The recital to the 2018 directive explains the purpose: the customer’s VAT number became a substantive condition of the exemption, not just a formality.

The customer then declares the purchase as an intra-Community acquisition in its own country.

Services: reverse charge (Articles 44 and 196)

For most services to business customers, the general rule in Article 44 is that VAT is due where the customer is established. Under Article 196, if you are not established in that member state, the customer pays the VAT under the reverse charge.

For a WooCommerce shop, “services” can include things like digital downloads, online courses, licences and subscriptions sold to businesses. Some services have special place-of-supply rules (for example, those connected with land or event admission), so check how your services are classified.

Mixed orders

An order with a physical product and a download contains both a supply of goods and a supply of services. Each line follows its own rule, and the invoice needs the right note for each.

Domestic B2B sales are different

None of this applies when the customer is in your own country. A domestic business customer normally pays VAT as usual, whether or not it has a VAT number. A common mistake is a plugin setting that removes VAT for any valid VAT number, including domestic ones.

Checking the VAT number in VIES

VIES (VAT Information Exchange System) is the European Commission’s search tool for VAT numbers. It does not hold the data itself; it asks the national VAT databases of the member states and returns the answer.

What VIES tells you

• whether the number is valid for intra-EU transactions,
• in many countries, the name and address registered for the number. Some member states do not return them,
• a consultation number, if you enter your own VAT number as the requester. This is a reference for that specific check.

An “invalid” answer does not always mean the customer is lying. The Commission lists common reasons: the number does not exist, it is not activated for intra-EU transactions, or the registration is not finished yet. Changes may also take time to appear.

What VIES does not tell you

The Commission states plainly that a VIES confirmation does not by itself give a right to exempt an intra-Community supply. It is one piece of evidence. For goods, you also need proof of transport and a correct recapitulative statement. For services, Article 18 of Implementing Regulation (EU) 282/2011 lets you treat a customer as a business if it gave you its VAT number and you obtained confirmation that the number is valid, together with the associated name and address, unless you have information to the contrary.

When VIES is unavailable

National databases behind VIES are sometimes offline, and the Commission says it cannot guarantee uninterrupted service. Your checkout should not break when this happens. Common approaches are:

• charge VAT and correct later. Accept the order with VAT, re-check the number when VIES is back, then issue a corrected invoice or credit note if it is valid,
• hold the order until the number can be checked,
• check business customers at registration, so the check is already done when they order.

Which approach is acceptable for exempting a supply without a fresh check is a question for your tax adviser and your national rules.

Practical checks before you rely on a number

• Remove spaces, dots and dashes, and make sure the country prefix is there. Note that VIES uses EL for Greece, not GR.
• Compare the name and address returned by VIES with the order. A valid number belonging to a different company is a warning sign.
• Check the country. For goods, Article 138 requires a number from a member state other than the one where transport begins. Many shops also require the VAT number’s country to match the delivery country, as a stricter internal rule.
• Re-check regular customers periodically, not only at registration. VAT registrations can be cancelled.

What the invoice must say

Article 226 of the VAT Directive lists the details of a full VAT invoice. For cross-border B2B sales, these points matter most:

• Point 3: your own VAT identification number.
• Point 4: the customer’s VAT identification number, for supplies where the customer is liable for the VAT and for exempt supplies of goods under Article 138.
• Point 11: for an exempt supply, a reference to the exemption: the article of the directive, the corresponding national provision, or another reference showing that the supply is exempt.
• Point 11a: where the customer is liable for the VAT, the mention “Reverse charge”.

The usual invoice details also apply: date, sequential number, names and addresses, description of goods or services, quantities, net amounts and the VAT rate or exemption.

Example wording

For goods (Article 138):

Tax-exempt intra-Community supply (Article 138 Directive 2006/112/EC)

For services (Article 196):

Reverse charge: VAT to be paid by the recipient (Article 196 Directive 2006/112/EC)

Your invoice language and national reference may differ. Germany, for example, refers to its own law (§ 4 Nr. 1 Buchstabe b and § 6a UStG for intra-Community supplies). Many businesses add the directive article and the national provision side by side.

Do not use only “Reverse charge” on an invoice for goods. For an intra-Community supply of goods, the Directive asks for a reference to the exemption (point 11). “Reverse charge” (point 11a) is the mention for cases where the customer owes the VAT, such as the services above.

When to issue it

Article 222 sets a deadline: for intra-Community supplies of goods and for reverse-charge services under Article 196, the invoice must be issued no later than the 15th day of the month after the month in which the supply took place. Many WooCommerce shops issue the invoice with the order, which meets this easily.

What to keep as proof

If a tax authority questions a 0% invoice, you need to show why VAT was not charged. A sensible record for each order includes:

• the VAT number as entered, with its country prefix,
• the date and time of the VIES check, the result, and the consultation number,
• the name and address returned by VIES, if any,
• which rule you applied (exempt supply of goods or reverse charge for services) and the invoice note used,
• for goods, the proof of transport. Article 45a of Implementing Regulation (EU) 282/2011 presumes that goods were transported to another member state when you hold at least two non-contradictory items of evidence issued by two different, independent parties: for example a transport document such as a CMR consignment note, plus an insurance policy or bank record for the transport. Where the customer arranges the transport, the presumption also needs a written statement from the customer, which it must provide by the 10th day of the month after the supply,
• confirmation that the sale is included in your recapitulative statement for that period.

The Commission’s Your Europe portal also recommends keeping a record of your VIES validation in case of a tax inspection. How long you must keep these records is set by national law.

Common mistakes

1. Removing VAT for any valid number. Domestic sales, and sales where the goods do not leave your country, do not qualify.
2. Checking only the format. A number can look correct and still be inactive or belong to someone else.
3. Not storing the check. A “valid” message on screen is not evidence once the page is closed. Keep the consultation number.
4. Using the wrong invoice note. Goods and services need different wording, and mixed orders need both.
5. Forgetting the recapitulative statement. Since 2020, filing it correctly is a condition of the goods exemption itself.
6. No plan for VIES downtime. Both a checkout that fails and one that silently removes VAT without a check cause problems later.
7. Showing VAT-inclusive prices to verified businesses and removing VAT only at checkout. Customers then see a total that changes at the last step. Many B2B shops show net prices to verified business customers instead.

What WooCommerce does and does not do

WooCommerce core calculates VAT from tax rates and the customer’s address. It has no VAT number field, no VIES check, and no invoice note for intra-EU B2B sales. These come from extensions or custom code, so check what yours does against the list above: where the field appears (classic and block checkout), how it handles VIES downtime, whether it stores the consultation number on the order, and whether it treats goods and services differently.

We are building Cartnorm B2B for this. It is not released yet; the box below explains how to hear when it is.

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