Invoicing in the EU: which rules still apply?
If you've watched tevevision, read a newspaper, or been on social media in the past few months, you've probably heard the phrase ‘Brexit means Brexit’. But, when it comes to invoicing, Brexit doesn’t mean Brexit just quite yet...
In March, the Prime Minister triggered Article 50 which set the ball rolling for the UK's departure from the European Union (EU). But, officially, the UK's status hasn't changed and the country will remain part of the EU until the end of Brexit negotiations. This means that for about two more years, EU laws, rules and regulations still apply in the UK - including EU standards on invoicing for intra-community transactions.
So here, we help break down the rules on invoicing in the EU to help you get to grips with invoicing for customers across the continent - ¡vamos!
Basic rules of invoicing in the EU
The EU has a single set of invoicing rules which apply in each of the 28 member states, so whether you’re sending an invoice to a customer in France, Sweden or Lithuania, the basic process is the same. The main principles of EU-wide invoicing rules include:
- Electronic invoices are just as valid as paper invoices.
- Businesses can store invoices physically or electronically.
- Businesses can outsource invoicing to a third party (but only in some circumstances).
But bear in mind that some EU member states might have additional national rules for invoicing, and you can find details in the European Commission's database.
When do I need to send an invoice to a customer in the EU?
Whether or not you need to send an invoice depends on whether you’re selling to another business or to an individual customer: most business-to-business (B2B) sales require an invoice for VAT purposes, whilst only certain business-to-consumer (B2C) transactions need one.
Generally speaking, you must send an invoice if you’re selling to another business based in the EU or to a non-taxable legal entity, such as a public body.
You usually don’t need to issue an invoice to private individuals, unless they are taxable persons in another EU country – for example, if they sell certain vehicles or occasionally trade things like land and buildings.
Although EU laws don't require you to send an invoice every time you sell to someone on the continent, it's always a good idea to let your customers know how much they owe and what they're paying for - if you want to get paid, an invoice is key.
What should I include on a intra-community invoice?
A full VAT invoice for a customer in the EU should always contain:
- A unique invoicing number
- Date of issue
- Date of payment (if different to date of issue)
- Full name and address of the customers
- Full name and address of the supplier
- Description (and quantity) of goods or services supplied
- Unit price of each goods or service, not including tax or discounts (unless included in the original price)
- The rate of VAT
- The total amount of VAT payable
- Breakdown of VAT amount payable by VAT rate or exemption
- Customer’s VAT transaction number (if applicable)
Though the EU guidelines lay out mimimum requirements for invoices, there’s nothing to stop you including extra information, such as a company logo or picture.
EU invoicing in Debitoor
All these rules might seem a bit overwhelming, but luckily, Debitoor accounting and invoicing software can help you become an EU invoicing pro!
One of the trickiest parts of creating an invoice for an EU customer is working out VAT. Debitoor supports intra-community transactions by automatically setting the rate of VAT depending on where your customer is based and whether the transaction can be zero-rated.
If you’re selling to customers abroad, you might sometimes need invoicing software that supports multiple languages. With Debitoor, you can send invoices in 12 of the main European languages. Just choose your preferred language and let Debitoor take care of the translation.
Even creating invoices in foreign currencies can now be done in just a few clicks - all you need to do is select the currency from a drop-down list. Debitoor online invoicing software creates multi-currency invoice templates using up-to-date exchange rates, helping you send invoices across Europe in no time at all.