A business from Austria orders in your shop and enters its VAT ID. Does the invoice need German VAT? Many shops and apps call this case reverse charge. Legally, selling goods to a business in another EU country is usually a tax-exempt intra-community supply. This guide explains when it applies, what the invoice must show, why you should check the VAT ID and how Shopify and Kurswacht Invoice handle reverse charge. It is written from the perspective of a seller based in Germany.

General overview, not tax or legal advice. Check individual cases with your accountant.

Who pays which VAT?

For a shop based in Germany, simplified:

Customer VAT
Consumer or business in Germany German VAT, for example 19% or 7%
Business in another EU country with a valid VAT ID, goods shipped there tax-exempt as an intra-community supply; the customer accounts for VAT in their country
Consumer in another EU country up to the threshold usually German VAT, above it the VAT of the destination country (see OSS)
Customer outside the EU tax-exempt as an export if you can prove it

Reverse charge or intra-community supply?

For goods sold to businesses in other EU countries, the supply is tax-exempt in Germany (§ 4 No. 1(b) and § 6a UStG, the German VAT Act). Your customer pays VAT on the purchase in their own country as an intra-community acquisition. Because the tax shifts to the customer this way, the case is commonly called “reverse charge”.

Reverse charge in the strict sense means the customer owes the tax (“Steuerschuldnerschaft des Leistungsempfängers”). It mainly concerns services to businesses in other EU countries; the invoice must then state exactly that (§ 14a(1) UStG). If you sell goods, it is almost always an intra-community supply.

When the supply is tax-exempt

Under § 6a(1) UStG, all of the following must apply:

  1. The goods are transported or shipped to another EU country.
  2. Your customer is a business buying for its business.
  3. The customer must pay VAT on the acquisition in their country.
  4. The customer has given you a valid VAT ID issued by another EU country.

You must also be able to prove that the goods arrived in the other EU country, for example with an entry certificate (Gelangensbestätigung, § 17b UStDV). And you report the supply in the EC Sales List (Zusammenfassende Meldung) to the Federal Central Tax Office (BZSt). Without a correct EC Sales List, the exemption does not apply (§ 4 No. 1(b) UStG).

What the invoice must show

In addition to the usual required details:

  • your VAT ID and your customer’s VAT ID (§ 14a(3) UStG),
  • a note on the exemption, for example “tax-exempt intra-community supply”,
  • the customer’s name and address – a small-amount invoice without an address is not allowed here (§ 33 UStDV).

You issue the invoice by the 15th of the following month (§ 14a(3) UStG).

Why you should check the VAT ID

A valid VAT ID is a condition for the exemption. If it turns out to be invalid, you may owe German VAT on the sale. Good-faith protection only applies if false information from the customer was the cause and you could not have spotted it even with the care of a prudent businessperson (§ 6a(4) UStG). There are two official ways to check:

Service What it checks
VIES (European Commission) whether the number is valid. If you enter your own VAT ID as well, you receive a consultation number you can keep as proof.
BZSt (§ 18e UStG) simple confirmation: whether the number is valid; qualified confirmation: also whether name, town, postcode and street match the number.

How Shopify handles it

If you use Shopify Tax, Shopify Help says you can show a field for the company VAT number at checkout; further requirements apply. Shopify checks the number in real time via VIES and removes VAT on eligible cross-border orders. If VIES is unavailable, Shopify charges VAT. Shopify stores the number in the customer profile. Alternatively, you can exempt individual customers from tax in their profile. Either way, Shopify decides which tax is on the order.

How Kurswacht Invoice handles it

  • Tax from Shopify: the app does not set VAT rates. If Shopify calculates 0% for a business with a VAT ID in another EU country, the app assigns the invoice to the reverse charge tax category – for sellers based in the EU. You set the note for it yourself; agree the wording with your accountant.
  • VAT IDs: you enter your VAT ID under Settings › Company and tax details. The app looks for the customer’s VAT ID in the usual order fields and in company, name and address lines. If your checkout uses its own field, enter its name under Advanced › Buyer VAT ID. If it finds no customer VAT ID for a reverse charge invoice, it stops before the invoice number.
  • Address: for reverse charge, the app creates no small-amount invoice without an address; if the address is missing, it stops before the number.
  • Unclear cases: if Shopify calculates 0% and no reason is recognizable, the app holds the invoice for review by default.
  • VIES check (optional): with the switch Check the VAT ID with the EU (VIES) before reverse charge, the app checks the number with VIES before the invoice is created. If it is invalid, the app stops before the invoice number; if VIES is unavailable, it tries again later. The confirmation is stored with the document, with the date and – if VIES returns one, for example because your own VAT ID is set – the consultation number. Without the switch, the app checks only the format.
  • Corrections: if the VAT ID on a finished invoice is wrong, change it in the Shopify order and have the invoice cancelled and issued again correctly.
  • DATEV: in the DATEV export, these invoices are booked to the intra-community supply account.

What the app does not do: it does not match name and address like the BZSt’s qualified confirmation, and you or your accountant handle the EC Sales List and the proof of arrival. You remain responsible for whether reverse charge or an exemption really applies – also with the VIES check.

Consumers in other EU countries: OSS

If you sell goods to consumers in other EU countries, the exemption for intra-community supplies does not apply; as a seller under the standard VAT rules you charge VAT. Other exemptions, for example for small businesses, are not affected. If your sales to consumers in all other EU countries together stay at or below €10,000 net in the previous and the current year, German VAT usually applies. Above that, the VAT of the destination country applies (§ 3c UStG). So that you do not have to register in every country, you report these sales through the One-Stop Shop (OSS) with the BZSt – quarterly, by the end of the following month.

Kurswacht Invoice uses the VAT rates Shopify calculates per country and provides the OSS summary (CSV): totals per country of delivery and VAT rate, with credit notes deducted. Credit notes for sales from earlier quarters are marked. Amounts are in the document currency; convert them to euro for the return if needed. The app does not monitor the threshold, and you file the return yourself. Details: export and archive.

Install Kurswacht Invoice

Kurswacht Invoice is available on the Shopify App Store. The Free plan includes 25 documents a month, and every plan has all features. Questions about your shop? Write to us – you get an answer from the app’s developer.

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