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Invoicing a business in Germany or Austria from the UK: do I charge VAT?

Short answer

For most services to a business customer in Germany or Austria, no. Under the B2B general rule the service is supplied where the customer belongs, so it is outside the scope of UK VAT and the customer accounts for VAT in its own country (HMRC VAT Notice 741A, 6.3). Keep the customer's VAT number as evidence, put the net value in box 6 of your VAT Return, and send no EC Sales List. When a German or Austrian business invoices you, you apply the reverse charge: the same amount of VAT in box 1 and box 4.

The rule in four lines

Read on GOV.UK on 5 November 2026:

YouRuleSource
Sell a service to a German or Austrian businessSupplied where the customer belongs: outside the scope of UK VAT. Keep commercial evidence that the customer is in business abroad; for EU customers the VAT number is the best evidenceNotice 741A, 6.3
Customer cannot show a VAT number or other proof of businessTreat it as a sale to a consumer: supplied where you belong, so UK VAT at the normal rateNotice 741A, 6.2 and 6.3
Report the saleNet value in box 6 (outside the scope supplies are listed there); nothing in box 1. No EC Sales List for services to EU businesses since 1 January 2021Notice 700/12, 3.7, GOV.UK EU sales
Buy a service from a German or Austrian businessReverse charge: output tax in box 1, the same input tax in box 4, the net value in box 6 and box 7Notice 741A, 5.2

Check the special rules first (Notice 741A, 6.4): services on land, admission to events, passenger transport and a few others follow their own place of supply. Goods are a different subject: exports leave the UK zero rated with proof of export (Notice 703).

Worked quarter: Sam, web developer, limited company, VAT quarters to March

Sam's company is VAT registered and sells website builds. In the quarter 1 January to 31 March 2027:

  1. 12 February 2027: invoice to a GmbH in Berlin for a website build, £4,000. The GmbH gave its German VAT number (DE plus 9 digits), Sam keeps it with the invoice. No UK VAT on the invoice.
  2. 3 March 2027: an Austrian freelance designer with an Austrian VAT number invoices Sam's company £1,500, without VAT. Sam's company accounts for VAT itself at 20%: £300.
  3. Plus Sam's normal UK sales of £20,000 with £4,000 VAT and UK costs of £5,000 with £1,000 VAT.
BoxUK onlyGermany saleAustria purchaseReturn
1 VAT due on sales£4,000£0£300£4,300
4 VAT reclaimed£1,000£300£1,300
5 Net to pay£3,000
6 Total sales£20,000£4,000£1,500£25,500
7 Total purchases£5,000£1,500£6,500

The reverse charge costs Sam nothing in cash (£300 in, £300 out) because the company can reclaim in full. It still has to be on the return. The return for this quarter is due on 7 May 2027, one month and 7 days after the quarter end (GOV.UK). A business that is not VAT registered and buys such services from abroad still counts their value towards the registration threshold (Notice 741A, 5.7).

What to put on the invoice

HMRC's rule is about evidence, not a fixed wording: keep proof that the customer is a business abroad (Notice 741A, 6.3). In practice a clean invoice to a German or Austrian business shows:

  1. Your name, address and UK VAT number, the customer's name, address and their VAT number (German: USt-IdNr., Austrian: UID, starting ATU).
  2. The net amount and no UK VAT.
  3. A line such as "Reverse charge: VAT to be accounted for by the recipient". German and Austrian customers book the VAT themselves (§ 13b UStG in Germany), and the line tells their bookkeeper why there is none.

The German side of the same deal, in German: Rechnung ins Ausland: Reverse Charge zwischen Deutschland, Österreich und UK.

Common mistakes

  1. Charging UK VAT to a German business. The customer cannot reclaim UK VAT through its German return, so it will ask for a credit note.
  2. Leaving the sale out of box 6. Outside the scope sales still belong in box 6 (Notice 700/12, 3.7).
  3. Forgetting the reverse charge on bought services. It applies even if your EU supplier has a UK VAT number, and it is not optional (Notice 741A, 5.1 and 5.6).
  4. No VAT number on file. Without it or other proof of business, HMRC treats the sale as a consumer sale with UK VAT.

And Octobooks?

Octobooks books a reverse charge purchase as two VAT lines that cancel out on the VAT account, box 1 and box 4, with the net value in boxes 6 and 7, so the quarter above comes out as shown. Your own AI, such as Claude, posts the invoices into the ledger; Octobooks prepares the VAT figures and you file the return. How an AI prepares a return: Can AI prepare my VAT return?. General information, not tax advice.

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Sources

Updated 2026-11-05. General information, not tax advice for your own case.