How do I handle VAT for international freelance clients from Germany?

• B2B clients in the EU with a valid VAT ID: you usually don’t charge German VAT; apply reverse charge and put the client’s VAT ID and the legal note on the invoice.
• B2B clients outside the EU: the place of supply is typically where the customer is established: again no German VAT, but keep evidence of the customer’s status and location.
• B2C clients: many services default to German VAT; digital services to EU consumers use OSS rules. Always keep documentation proving whether the sale was B2B or B2C and where the customer is.

1. Identify the customer type

   • Ask for a VAT ID (EU) or business proof (non-EU). Verify EU VAT IDs in VIES and keep a screenshot.

2. Determine place of supply

   • B2B services generally tax where the customer is located (reverse charge if in EU).
   • B2C services often tax where the supplier is (Germany), unless special rules apply: e.g., digital services, real-estate related services at the property location, certain event/cultural/education services.

3. Apply the correct mechanism

   • EU B2B: invoice without VAT, add note like “Reverse charge – customer liable for VAT”.
   • Non-EU B2B: invoice without German VAT; keep proof of the client’s location.
   • EU B2C digital services: register for OSS and charge the customer’s country rate; file OSS returns.
   • Other B2C: charge German VAT unless a specific exception moves the place of supply.

4. Keep airtight records

   • Customer status proof, VAT ID checks, contracts, service descriptions, and any location evidence (billing address, IP for digital, event venue, etc.).

• EU B2B reverse charge:
  “VAT reverse charge applies. Customer is liable for VAT under the reverse charge mechanism. Customer VAT ID: [ID].”
• Non-EU B2B:
  “Service rendered to a business customer established outside the EU. No German VAT due under place-of-supply rules.”

• Coaching/consulting online: often B2B reverse charge in EU; for B2C in EU, default is German VAT unless digital-services rules or specific exceptions apply.
• Digital products/subscriptions to consumers: use OSS; collect the correct VAT rate based on the customer’s EU country and keep two pieces of location evidence.
• On-site workshops in another EU country: can shift place of supply; check venue country rules and whether local VAT registration is needed.

• Treating every foreign client as no-VAT without checking B2B vs B2C.
• Forgetting to verify VAT IDs and save evidence.
• Selling digital services to EU consumers without OSS and correct rates.
• Mixing personal coaching (B2C) invoices into a B2B reverse-charge workflow.

You coach a French company remotely. They share a valid VAT ID. Your invoice excludes VAT, states reverse charge, and lists their VAT ID.
You also sell a monthly video course to EU consumers: you onboard to OSS, charge each buyer’s local rate automatically in your checkout, and file quarterly OSS.

1. Classify each service line as B2B or B2C, EU or non-EU.
2. Set invoice templates with the correct legal notes.
3. If you sell digital B2C, enable OSS in your payment platform.
4. Keep a VAT folder with VIES screenshots and location proofs.

📌 Related: When do freelancers charge VAT? and From unemployment to coaching business.

⚠️ IMPORTANT LEGAL DISCLAIMER:

This content is for educational and informational purposes only and does not constitute financial, tax, legal, or investment advice. You should not rely on this information as a substitute for, nor does it replace, professional financial or tax advice. Always consult with qualified professionals (tax advisors, financial planners, lawyers) before making any financial decisions or taking any actions based on this information.

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Disclaimer: This is general information and may differ for individual cases. Learn more about financial planning with Financemate in a discovery call. Confirm edge cases with your tax advisor.