European companies, American companies, and the two questions that change your invoice: where is the client, and do they have a VAT number.
The two questions that change everything
Two pieces of information decide the treatment, and nothing else.
Where the client is established: in the same country, in another Union country, or outside the Union.
And whether it is a company registered for the tax or a private individual.
One note on method: ask those two questions in the first message, before even talking about price. They change the amount the client will see, and a corrected invoice makes a poor impression.
The three cases
Three situations, three treatments.
The client is established in your country: the invoice follows the domestic rules, with the applicable tax or the exemption wording if you are below the threshold.
The client is a company registered in another Union country: the tax is in principle not charged, the responsibility passing to the client, provided the number is valid, the point dealt with above, and that you are yourself listed in the register of intra-community operators.
The client is established outside the Union: the operation in principle falls outside the scope, but the rule depends on the nature of the service and the country, and is checked case by case.
One general precaution: those three cases describe the principle, not your situation. The exact regime depends on your status and the service rendered, and is settled with an accountant before the first invoice, not at declaration time.
What has to be written on the document
Seven mentions, none optional.
Your full details and your tax identification number.
The client's details and their tax number if they have one.
A sequential invoice number, with no gap in the series.
The issue date and the date of the service.
The description of the service rendered, precise enough for a third party to understand.
The amount, the currency, and the rate applied or the corresponding legal exemption wording.
And the payment terms, with the deadline and the bank details.
How to get paid without losing money
Four points to settle before the first invoice.
Choose the invoicing currency and stick to it: invoicing in your own currency transfers the risk to the client.
Compare the real cost of receipt, fixed fees and conversion margin included, which varies a lot by channel.
Provide for who pays the international transfer fees, a mention to write on the document.
And set a short payment deadline for a first client, fifteen days rather than thirty.
What to keep
Four items, to keep for the legal period.
The invoices issued, in order.
The proof of validity of the client's tax number, dated.
The contracts or written exchanges describing the service and the rights granted.
And the payment records, which link the invoice to the transfer received.
What changes with where the client sits
| The client | What appears on the invoice | Point to verify |
|---|---|---|
| A company in the same country | The usual local tax | Its company number |
| A company elsewhere in the union | A reverse-charge mention | Its valid intra-union number |
| A company outside the union | An out-of-scope service | Proof of its establishment |
What is kept in the file
The accepted quote, the contract, proof of file delivery, the transfer statement and the day's exchange rate. An audit asks for those five, not the invoice alone.
What is confirmed with an accountant
The regime that applies to your situation, how currency conversion is treated, and the threshold beyond which the filing changes shape. These vary and are not copied from a peer.
When to see an accountant
Three moments, and not only the first.
Before the first foreign invoice, to validate the applicable regime.
When your turnover approaches a threshold, because crossing it changes your obligations.
And as soon as a client asks for particular treatment, a withholding at source for instance, a frequent situation with certain countries.
One last marker: invoicing abroad is not more complicated, it is simply less forgiving. Two checks made before sending cost a few minutes; the same mistake found at an audit costs the tax and the penalty.
