Taxes and Charges on Cross-Border Supplies of Services between Businesses (B2B)
Since the EU-wide reform of the place-of-supply rules on 1 January 2010 (Directive 2008/8/EC), the basic rule for other services between businesses (B2B) is: it is no longer the seat of the supplier that is decisive, but the seat of the recipient of the service (the customer) or its permanent establishment. This basic rule remains unchanged to this day and continues to form the central principle of EU place-of-supply law.
Exceptions to the Basic Rule
By way of exception to the basic rule, the following continue to apply:
- Services connected with immovable property: taxable at the location of the property.
- Cultural, artistic, scientific, sporting, entertainment and educational services, as well as admission to such events: taxable at the place of performance.
- Passenger transport: taxable according to the distance covered.
- Restaurant and catering services: taxable where they are actually supplied.
- Short-term hire of means of transport (up to 30 days, or up to 90 days for vessels): taxable at the place where the means of transport is put at the customer’s disposal; for longer hire, the basic rule again applies.
Reverse-Charge Procedure and Documentation Requirements
For services taxable elsewhere in the EU under the basic rule, the reverse-charge procedure must be applied within the EU: the supplying business invoices without showing its own VAT, with the note “reverse charge – VAT liability of the recipient”, and stating the VAT identification numbers of both parties; the recipient owes the tax in its state of residence. Such services must be declared both in the periodic VAT return and in the EC Sales List.
Before concluding a contract, the business status of the contracting party should be verified – for businesses from the EU, by checking the VAT identification number (in Germany, with the Federal Central Tax Office); for businesses from third countries, by requesting a corresponding certificate of business status.
FAQ
Cross-border services were subject to the VAT of the country in which the supplying business was established. It was therefore the seat of the supplying business that was decisive.
It is no longer the seat of the supplying business that is decisive, but the seat of the recipient of the service (the customer) or its permanent establishment. Within the EU, the reverse-charge procedure is mandatory for services subject to the basic rule; in addition, EC Sales Lists must be filed.
Special rules continue to apply, among others, to:
- services connected with immovable property (place where the property is located);
- cultural, artistic, scientific, sporting, entertainment, educational and similar services, and organisers of such events (place of performance);
- passenger transport (place where the transport takes place);
- restaurant and catering services (place where the service is supplied);
- short-term hire of means of transport up to 30 days (place where actually put at the customer's disposal; vessels up to 90 days).
Catalogue services were governed as an exception until 31 December 2009; since the 2010 reform, they have been taxable under the basic rule, at the place where the recipient of the service carries on its business. These include, among others, patent and copyright rights, advertising services, legal/economic/scientific consultancy, data processing, the provision of software, and telecommunications and broadcasting services.
Within the EU, the tax liability shifts to the recipient of the service. The supplier invoices without VAT. The invoice must show the VAT identification numbers of both the supplier and the recipient, together with a note on the “reverse charge – VAT liability of the recipient”.
For EU businesses, the contracting party's VAT identification number must be verified (e.g. via the EU-wide MIAS/VIES system, or in Germany with the Federal Central Tax Office). For businesses from third countries, a certificate of business status must be submitted, unless the service in question is a catalogue service.
EC Sales Lists are required both for intra-Community supplies of goods and for services taxable elsewhere in the EU under the basic rule. Supplies of goods are generally reported monthly, services quarterly; the exact deadlines and reporting channels should be checked against the currently applicable national rules (in Greece today, mainly electronically via myDATA/ΑΑΔΕ).
The decisive point in time is when the service is performed, not the invoice date. For continuous services, the end of the service is the decisive point in time.
Services connected with immovable property continue to be taxed at the location of the property. The foreign VAT of the country in which the property is located must be applied; input tax deduction requires tax registration abroad or the appointment of a fiscal representative.
As of June 2026. All information on these pages is provided without guarantee or liability.