Invoicing a client in the EU or outside it

The question is not whether VAT applies: it is where your client is and what they are

For services, the general business-to-business rule places the transaction in the customer's country. That is why an invoice to a French company and an invoice to an Argentinian company both end up without Spanish VAT, but by different routes and with formal obligations that bear no resemblance to each other.

Before looking at the map there is another question to answer: is your client a business or a final consumer? That distinction changes the outcome more than the border does, and it is the one that produces the most badly issued invoices.

The two situations, side by side

	Client in the European Union	Client outside it
VAT on the invoice	Not charged if the client is a business with a valid VAT number, with the reverse charge wording	Normally not charged, because the transaction falls outside the Spanish VAT territory
Prior registration	Entry on the roll of intra-Community operators, the ROI, through box 582 of modelo 036	No specific register
Information return	Modelo 349, the recapitulative statement of intra-Community transactions	None
What has to be checked	That the VAT number is live on the VIES system on the invoice date	That the client is a business established outside, and that you can prove it
If the client is a consumer	VAT is charged; once the common 10,000 € annual threshold for distance sales and digital services is crossed, the client's country's VAT applies, through the one-stop shop	It depends on the service and the country; there are use-and-enjoyment rules that can bring the transaction back to Spain

The register is not just another piece of paper

Without being on the ROI you have no intra-Community VAT number, and without one you cannot issue a VAT-free invoice to an EU business customer. The application is made on the 036 and the authorities may carry out checks before granting it, so it is worth asking for it with time in hand and not in the week you have to invoice.

And VIES validation is done invoice by invoice and by date. A VAT number that was valid in January may have been revoked in September. If the number was not live on the day of the invoice, the tax office can argue the transaction should have carried Spanish VAT — and that VAT is owed by the person issuing the invoice, not by the person receiving it. Keeping the proof of the check, with its date, is what prevents the argument.

What nobody tells you: the VAT on what is invoiced to you

Most self-employed people who end up on the ROI get there not by selling but by buying. Advertising bought from a platform based in Ireland, cloud hosting, payment gateway commissions, subscriptions to tools: all of these are acquisitions of services from an EU supplier and they work through the reverse charge.

That means you declare the VAT yourself, charging it to yourself in your quarterly return and deducting it in the same movement. In many cases the cash effect is nil, but the formal obligation is real: you have to be on the ROI and you have to report those acquisitions on modelo 349. Anyone who has spent two years paying for advertising without being registered has a formal problem they will not discover until the letter arrives.

With suppliers from outside the Union the self-assessment mechanism can look similar depending on the service, but there is no 349 and no register, and the evidence becomes the invoice and the contract.

Goods are a different map

Everything above is about services, which is what most of our clients sell. If what leaves is physical goods, the rules change shape entirely: a supply to a business in another EU country is an intra-Community supply, exempt if the conditions and the proof of transport are met, and it also goes on the 349. A supply to a customer outside the Union is an export, exempt on production of the customs documentation. The formalities are heavier and the evidence is different, and mixing the two sets of rules on the same invoice template is a common source of trouble.

Proving where your client is

• Their tax identification in the destination country and, where one exists, the equivalent of our certificate of being registered for a business activity.
• The contract, with the client's address and a description of the service.
• The payment trail: the account the money comes from, which is rarely somewhere the company is not.
• And the coherence of all of it: an «American» client with a correspondence address in Spain and the work performed here is not the transaction the invoice says it is.

The in-between case: invoicing a client in the EU or outside it

Both columns assume you know who your client is and where they are. There are four common situations in which neither of those is clear, and they are the ones that produce badly issued invoices.

• The EU client who is in business but does not appear in VIES. It exists and it is frequent: small companies that never applied for registration as an intra-Community operator in their own country. Being in business is a fact and the registration is a formality — but the formality is precisely what lets you safely not charge VAT. Without a positive validation, the prudent position is to charge Spanish VAT and ask them to register. Arguing it afterwards, with the invoice already issued, is a much worse road.
• The platform in the middle. When you are paid through a marketplace, an agency or an intermediary, your client for VAT purposes may be the platform and not the end user. That changes the country of the transaction, changes whether a recapitulative return is due and changes what the invoice has to say. The terms of service have to be read to find out who is invoicing whom, because it rarely matches intuition.
• The group with a European subsidiary. Invoicing a United States parent is not the same as invoicing its Irish or Dutch subsidiary, even though the person you deal with is the same and the email ends in the same domain. What governs is who is the legal recipient of the service and where they are established, and that is in the contract or the purchase order.
• The United Kingdom, and the other nearby third countries. Since the UK's departure from the Union a British client is no longer an EU one for these purposes: there is no VAT number to validate and no recapitulative return to file, but there is an obligation to evidence their status and where they are established. Habits formed before that change are a constant source of errors, and they are the errors we correct most often for British and Irish readers.

What to look at before issuing the invoice

• The contract or purchase order, with the recipient's name and address — not the address of the person you talk to.
• Their tax identification and, if they are in the EU, a screenshot of the VIES validation with its date, filed alongside the invoice.
• Exactly what service you are supplying. There are special rules for services connected with immovable property, transport, admission to events and certain electronically supplied services, which depart from the general rule.
• Whether your client is a business or a final consumer, and how you would prove it if you were asked.
• Your annual volume of sales to consumers in other EU countries, to know whether you are near the common 10,000 € threshold and the one-stop shop.
• The list of your EU suppliers: advertising, hosting, tools and subscriptions. That is what decides whether you need the registration even if every one of your clients is Spanish.
• The date you were entered in the register, and whether it was in force on the day of each invoice.

And a boundary we set out plainly: what your client's own country requires of them — whether they have to self-account, what their local rate is, what their own filings say — is not something we advise on. We deal with the Spanish side, and where the two have to fit together we say so and work with whoever advises them.

What we do with invoicing a client in the EU or outside it

We start with your book of clients and suppliers, country by country, and classify each relationship: business or consumer, inside or outside, service or supply of goods. Out of that comes which invoices carry VAT, which do not and with what wording, which returns have to be filed and whether you need the ROI, the one-stop shop or both.

Then we leave it running: VIES validation saved with its date, the 349 filed on time and the correct wording in your invoice template. And we tell you which transactions are genuinely arguable — there are some — so that you know beforehand rather than afterwards. It is on invoicing abroad from Spain, and the form asks which countries your clients are in, which is where all of this begins.