- Blog Post
- Step Inside Accounting, Company
Selling to companies in other EU countries: 5 VAT rules
Step Inside Accounting · Practical guide
#StepInsideAccounting
1. Between EU businesses, the invoice has no VAT
For services between businesses, VAT is due in the customer’s country. Your company invoices without VAT and the customer declares it in their own country, under the reverse charge.
For goods sent to another EU country, a sale to a business with a valid VAT number is also exempt in Portugal. The customer pays VAT in the country of destination.
2. Check the customer’s VAT number in VIES
Before the first invoice, check the customer’s VAT number on the European Commission’s official website: VIES – VAT number validation. Choose the country, enter the number without the prefix and save the result with the date, as a PDF or a screenshot.
If the number is not valid, the customer is treated as a private individual and, as a rule, the invoice must include Portuguese VAT. Your company’s VAT number must also be active in VIES, which depends on the company having told the Tax Authority that it carries out transactions with the EU.
3. The invoice must say why there is no VAT
An invoice without VAT must always explain why:
- Services: the wording “IVA – autoliquidação” (reverse charge).
- Goods: the exemption wording for an intra-Community supply.
- In both cases: the customer’s VAT number with the country prefix, for example ESB12345678.
An invoice with no wording, or with the wrong wording, is one of the most common mistakes and leads to a fine.
4. File the recapitulative statement
The recapitulative statement (declaração recapitulativa) lists, customer by customer, sales of services and goods to businesses in other EU countries. It is due by the 20th of the following month (companies in the monthly VAT scheme) or by the 20th of the month after the end of the quarter (quarterly scheme). If sales of goods to other EU countries exceed €50,000 in a quarter, filing becomes monthly.
For goods, without the recapitulative statement the exemption may fall away and the company may have to pay the VAT. For services, failing to file leads to a fine.
Example
In February, your company, which is in the quarterly scheme, provides €3,000 of consulting to a Spanish company. The invoice is issued without VAT, with “IVA – autoliquidação” and the customer’s Spanish VAT number. The sale goes into the VAT return for the first quarter and into the recapitulative statement, by 20 April.
5. For goods, keep proof that they left Portugal
For a sale of goods to be exempt, the company must prove that the goods were transported to the other country. Keep the signed transport document (CMR), the carrier’s invoice and the proof of delivery.
If the customer arranges the transport, also ask them for a written statement confirming they received the goods, by the 10th of the month after delivery. Without proof of transport, the Tax Authority may demand Portuguese VAT.
Team tip
Before the first invoice to an EU customer, send us their VAT number and the VIES confirmation. We will confirm the right wording and include the sale in the recapitulative statement.
Want us to handle this for you?
Companies
Monthly accounting
Bookkeeping, tax obligations and managing partners’ salaries, all in one place.
€250 + VAT / month
Self-employed
Recibos verdes without the stress
Tax returns, VAT and Social Security handled by people who know the regime inside out.
from €80 + VAT / month
This article is for information only and does not replace professional advice. Figures and rules are those in force at the date of publication and may change.
Explore more resources
Share with someone who needs it
Want to know more? Explore the other Step Inside Accounting resources
- Blog Post
- Step Inside Accounting, Company
- Blog Post
- Step Inside Accounting, Self-Employee
- Blog Post
- Step Inside Accounting, Self-Employee