Compliance · Article 11.3

EU VAT compliance: Art. 226, OSS, reverse charge, B2C distance sales

The EU VAT Directive (2006/112/EC) sets the rules every Clozo invoice meets by design — mandatory fields under Art. 226, place-of-supply under Art. 44–58, OSS for cross-border B2C, and reverse charge for B2B intra-community services.

The EU VAT Directive 2006/112/EC is the master statute every EU member state implements with its own national VAT law. As a freelancer issuing invoices, you don't need to read all 414 articles — you need to know the five rules that apply to almost every freelance invoice, and you need to trust that Clozo applies them correctly. This article walks through the ones that matter, with the article numbers you can cite if a client or accountant queries the invoice.

Why this works this way

Art. 226 mandatory invoice fields — every EU invoice must contain:

1. The date of issue 2. A sequential number, based on one or more series, that uniquely identifies the invoice 3. The supplier's VAT identification number (where applicable) 4. The customer's VAT identification number (where the customer is liable for VAT under reverse charge) 5. The full name and address of the supplier 6. The full name and address of the customer 7. A description of the goods supplied or services rendered 8. The date of the supply (or the date of payment on account, if different from the issue date) 9. The taxable amount per rate or exemption 10. The unit price, exclusive of VAT, plus any discounts not included 11. The VAT rate applied 12. The VAT amount payable 13. Where an exemption is involved, a reference to the applicable provision of the directive (or the equivalent national provision) 14. Where the customer is liable for the tax, the mention "Reverse charge" 15. Where a margin scheme applies, the mention of which one (see article 12 glossary entry on margin scheme)

Clozo's PDF renderer fills all 15 fields from your profile + the proposal data. If any required field is missing (e.g. you haven't filled your address yet), the issue blocks at the proposal level with a "Complete company details" banner — see article 3.2.

Place of supply rules — Art. 44 (B2B) and Art. 45 (B2C) determine where the service is taxed:

- B2B services across EU borders (Art. 44): the place of supply is where the customer is established. The customer accounts for VAT under reverse charge (Art. 196). You issue at 0% VAT with the legal note "Reverse charge — VAT to be accounted for by the recipient". The customer's VAT number must be valid in VIES (the EU's VAT-number checker). This is what the reverse_charge rule in Clozo's VAT engine enforces — see article 5.2.

- B2C services across EU borders (Art. 45 + Art. 58 for digital + Art. 59 for specific services): the default place of supply for B2C is where the supplier is established — your country's VAT rate applies. Exception: digital services (telecoms, broadcasting, electronically-supplied services like SaaS) follow Art. 58 — taxed where the consumer is. For these you can either register for VAT in every EU country your consumers live (impractical) or use the One-Stop-Shop (OSS) scheme.

OSS (One-Stop-Shop) — the EU's simplification scheme for cross-border B2C digital services and B2C distance sales of goods (Council Implementing Regulation (EU) 2019/2026, in force 2021-07-01). You register once with your home tax authority's OSS portal; you charge the consumer's country VAT rate; you file one quarterly OSS return that distributes the VAT to all EU member states where you have consumers. Clozo supports this via the oss rule in the VAT engine: when the freelancer's regime is OSS-opted-in and the client is B2C in another EU country, the engine applies the client's country rate (e.g., DE freelancer invoicing FR consumer = 20% French rate, not 19% German rate). The threshold below which OSS is not required: €10,000/year of cross-border B2C sales (Art. 59c) — under that, you can charge your home rate.

Reverse charge — Art. 196 of the Directive, transposed into every member state's national law: - DE: §13b UStG - FR: Art. 283-2 CGI - NL: Art. 12 lid 2 OB 1968 - ES: Ley 37/1992 Art. 84.Uno.2° - IT: Art. 17 DPR 633/72 - AT: §19 UStG AT - PL: Ustawa o VAT Art. 17

The legal effect: the customer reports the VAT in their own VAT return as both output VAT (on what they "purchased") and input VAT (the right to deduct it back), so the net VAT payable is usually zero but the entry has to appear. Clozo prints the reverse-charge note in the customer's language (since they're the one filing the entry) — this is the localisation behind the reverse_charge rule.

Non-EU clients — services exported outside the EU are outside the scope of EU VAT (Art. 44 for B2B, Art. 59 for some specific B2C services). Clozo issues at 0% VAT with no special note. Your tax-office return reports it under "exports" or your national equivalent. This is the non_eu rule in the engine.

Small-business regimes — Art. 281–294, expanded by Directive (EU) 2020/285 (in force 2025-01-01 with the cross-border SME scheme). Each member state has its own threshold and statutory wording. See article 3.5 for the seven regimes Clozo supports out of the box.

Troubleshooting

Keep reading

Proposals & Invoices

Line items, the VAT engine, and what determines your rate

Each line is `{description, quantity, rate, type}`. Clozo computes the net subtotal, then applies one of seven VAT rules based on your tax regime, the client's country, and whether the client is B2B or B2C.

Configuration

Tax regime selection: small-business schemes across the EU

Pick the regime that matches your tax registration — Clozo formats every invoice with the correct legal disclaimer and switches off the VAT line where the law says it stays off.

Working with Clients

Client country and VAT logic: how Clozo decides what VAT (if any) to charge

The combination of your country, the client's country, and whether the client has a validated EU VAT number determines which of five VAT rules applies — Clozo computes it automatically.