When invoicing corporate clients located across European Union (EU) member states, the Reverse-Charge Mechanism (RCM) shifts the responsibility of reporting and accounting for Value Added Tax (VAT) from the seller to the buyer.
1. Mandatory Legal Reverse-Charge Invoice Clause
In accordance with EU Directive 2006/112/EC Article 194, every cross-border B2B invoice must feature the following exact text notice:
"VAT REVERSE-CHARGE APPLIES. Customer to account for VAT under Article 194 of EU Directive 2006/112/EC."
2. VIES VAT Number Validation
Before issuing a zero-VAT invoice, always verify your client's VAT identification number on the official European Commission VIES system. Learn more on Vicaksha's Tax Rules Page.