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openaccountants/skills/eu-vat-directive.md
eu-vat-directive.md304 lines13.9 KB
v1EU
1---
2name: eu-vat-base
3description: Load this skill as a shared reference whenever working on VAT for any EU member state. Contains the common rules from Council Directive 2006/112/EC that apply across all 27 EU member states — intra-community acquisitions, reverse charge mechanics, place of supply rules, OSS, distance selling thresholds, and EU country list. Always load the country-specific VAT skill alongside this one. Do NOT use this skill alone — it must be combined with the relevant country skill (e.g. ireland-vat-return, germany-vat-return) which overrides anything country-specific.
4---
5 
6# EU VAT Base — Common Rules (Directive 2006/112/EC)
7 
8---
9 
10## Skill Metadata
11 
12| Field | Value |
13|-------|-------|
14| Scope | All 27 EU Member States |
15| Primary Legislation | Council Directive 2006/112/EC of 28 November 2006 (consolidated to 14 April 2025) |
16| Supporting Legislation | Directive 2022/542/EU (reduced rates reform); Implementing Regulation 282/2011 |
17| Source | EUR-Lex: https://eur-lex.europa.eu/eli/dir/2006/112/oj/eng |
18| Contributor | Open Accounting Skills Registry |
19| Version | 1.0 |
20| Rates Current As Of | 1 January 2026 |
21| Status | awaiting-validation |
22| Note | This skill contains ONLY rules common to all EU member states. Country-specific rules (form boxes, national rates, filing deadlines, small business thresholds) are in the country skill. The country skill overrides this one where there is any conflict. |
23 
24---
25 
26## Confidence Tier Definitions
27 
28- **[T1] Tier 1 -- Deterministic.** Derived directly from the Directive. Applies in all member states unless the country skill specifies otherwise.
29- **[T2] Tier 2 -- Reviewer Judgement Required.** Rule exists in the Directive but national implementation varies. Check the country skill.
30- **[T3] Tier 3 -- Out of Scope.** Not covered by this skill. Refer to country skill or warranted practitioner.
31 
32---
33 
34## Section 1: EU Member State List [T1]
35 
36**Legislation:** Directive 2006/112/EC, Article 1
37 
38Current EU member states (27) for counterparty location classification:
39 
40AT Austria | BE Belgium | BG Bulgaria | HR Croatia | CY Cyprus | CZ Czech Republic | DK Denmark | EE Estonia | FI Finland | FR France | DE Germany | GR Greece | HU Hungary | IE Ireland | IT Italy | LV Latvia | LT Lithuania | LU Luxembourg | MT Malta | NL Netherlands | PL Poland | PT Portugal | RO Romania | SK Slovakia | SI Slovenia | ES Spain | SE Sweden
41 
42**NOT EU (treat as non-EU / third country):**
43- UK (left EU 31 January 2020)
44- Norway, Switzerland, Iceland (EEA but not EU)
45- USA, Canada, Australia, UAE, and all other non-EU countries
46 
47---
48 
49## Section 2: VAT Rate Framework [T1]
50 
51**Legislation:** Directive 2006/112/EC, Articles 96-99; Directive 2022/542/EU
52 
53### Rate Structure Rules (apply in all member states)
54 
55| Rule | Detail |
56|------|--------|
57| Standard rate minimum | Cannot be lower than 15% (Article 97) |
58| Reduced rates | Maximum two reduced rates, neither below 5% |
59| Super-reduced rate | Below 5% -- only permitted for specific categories under Annex III derogations |
60| Zero rate | Permitted for specific categories under acquired rights |
61| Parking rate | Minimum 12% -- applies in some member states to transitional categories |
62 
63### 2026 Rate Table -- All EU Member States
64 
65| Country | Code | Standard | Reduced 1 | Reduced 2 | Super-Reduced | Zero |
66|---------|------|----------|-----------|-----------|---------------|------|
67| Austria | AT | 20% | 10% | 13% | -- | Yes |
68| Belgium | BE | 21% | 6% | 12% | -- | Yes |
69| Bulgaria | BG | 20% | 9% | -- | -- | Yes |
70| Croatia | HR | 25% | 5% | 13% | -- | Yes |
71| Cyprus | CY | 19% | 5% | 9% | -- | Yes |
72| Czech Republic | CZ | 21% | 12% | -- | -- | Yes |
73| Denmark | DK | 25% | -- | -- | -- | Yes |
74| Estonia | EE | 24% | 9% | -- | -- | Yes |
75| Finland | FI | 25.5% | 13.5% | -- | -- | Yes |
76| France | FR | 20% | 5.5% | 10% | 2.1% | Yes |
77| Germany | DE | 19% | 7% | -- | -- | Yes |
78| Greece | GR | 24% | 6% | 13% | -- | Yes |
79| Hungary | HU | 27% | 5% | 18% | -- | Yes |
80| Ireland | IE | 23% | 9% | 13.5% | -- | Yes |
81| Italy | IT | 22% | 5% | 10% | 4% | Yes |
82| Latvia | LV | 21% | 12% | 5% | -- | Yes |
83| Lithuania | LT | 21% | 5% | 12% | -- | Yes |
84| Luxembourg | LU | 16% | 8% | -- | 3% | Yes |
85| Malta | MT | 18% | 5% | 7% | -- | Yes |
86| Netherlands | NL | 21% | 9% | -- | -- | Yes |
87| Poland | PL | 23% | 5% | 8% | -- | Yes |
88| Portugal | PT | 23% | 6% | 13% | -- | Yes |
89| Romania | RO | 19% | 5% | 9% | -- | Yes |
90| Slovakia | SK | 23% | 5% | 19% | -- | Yes |
91| Slovenia | SI | 22% | 5% | 9.5% | -- | Yes |
92| Spain | ES | 21% | 10% | -- | 4% | Yes |
93| Sweden | SE | 25% | 6% | 12% | -- | Yes |
94 
95**Note:** Rates current as of 1 January 2026. Always verify current rates against the European Commission's TEDB (Taxes in Europe Database) before filing.
96 
97---
98 
99## Section 3: Intra-Community Acquisitions (ICA) [T1]
100 
101**Legislation:** Directive 2006/112/EC, Articles 2(1)(b), 20, 40-42
102 
103### Definition
104An ICA occurs when physical goods are dispatched or transported from one EU member state to another, between two VAT-registered businesses (B2B).
105 
106### Rules
107- The place of ICA is where transport ends (Article 40)
108- The acquiring business is liable for VAT via reverse charge
109- The supplier invoices at 0% (zero-rated intra-community supply)
110- The acquirer self-assesses output VAT at their local standard rate AND claims the same amount as input VAT
111- Net cash effect = zero for a fully taxable business
112- The supplier must quote the customer's VAT number on the invoice
113- The supplier must report the sale on an EC Sales List (ESL) / Recapitulative Statement
114 
115### Invoice Reference
116Supplier invoice must state: **"VAT exempt intra-Community supply -- Article 138(1) Directive 2006/112/EC"**
117 
118---
119 
120## Section 4: Reverse Charge -- Cross-Border Services (B2B) [T1]
121 
122**Legislation:** Directive 2006/112/EC, Articles 44, 196
123 
124### The General B2B Rule (Article 44)
125For services supplied B2B across EU borders, the place of supply is where the **customer** is established.
126 
127Consequence: The supplier charges 0% VAT. The customer self-assesses output VAT at their local rate and claims the same as input VAT. Net effect = zero for a fully taxable business.
128 
129### Mandatory for
130- All B2B cross-border services where Article 44 applies
131- Services supplied by a non-EU supplier to an EU VAT-registered customer
132 
133### Invoice Reference
134Supplier invoice must state: **"VAT exempt intra-Community supply of services -- Articles 44 and 196 Directive 2006/112/EC"** or simply **"Reverse charge"**
135 
136### Exceptions to Article 44 (place where service is physically performed) [T2]
137These services are taxed where performed, not where the customer is established:
138 
139| Service Type | Place of Supply | Directive Article |
140|-------------|----------------|-------------------|
141| Services related to immovable property | Where property is located | Article 47 |
142| Passenger transport | Distance covered | Article 48 |
143| Restaurant / catering services | Where physically carried out | Article 55 |
144| Short-term hire of transport | Where vehicle put at disposal | Article 56 |
145| Admission to cultural / sports events | Where event takes place | Article 53 |
146 
147[T2] For any of these exception categories, flag for reviewer to confirm correct place of supply treatment.
148 
149---
150 
151## Section 5: Reverse Charge -- Non-EU Supplier to EU Business [T1]
152 
153**Legislation:** Directive 2006/112/EC, Articles 44, 196
154 
155When a non-EU supplier (US, UK, CH, AU etc.) provides services to an EU VAT-registered business:
156- Supplier invoices at 0% (no EU VAT charged)
157- EU customer self-assesses output VAT at local rate
158- EU customer claims same amount as input VAT (if fully taxable)
159- Net effect = zero for fully taxable business
160- This applies to: software subscriptions (AWS, Google, Microsoft, Notion, Slack), consulting services, digital services, IP licences
161 
162**Common examples:** AWS, Google Workspace, Microsoft 365, Notion, Slack, Stripe fees, LinkedIn ads -- all trigger reverse charge when purchased by an EU VAT-registered business.
163 
164---
165 
166## Section 6: Distance Selling -- B2C Cross-Border [T1]
167 
168**Legislation:** Directive 2006/112/EC, Articles 33, 59c; OSS rules
169 
170### The EUR 10,000 Threshold
171If a supplier's total B2C distance sales across ALL EU countries combined exceed EUR 10,000 per calendar year:
172- Must apply VAT at the rate of the **customer's** country (destination principle)
173- Must either register in each destination country OR use the OSS (One Stop Shop)
174 
175Below EUR 10,000: apply VAT at the supplier's own country rate.
176 
177### One Stop Shop (OSS)
178Allows a supplier to register in one EU member state and declare and pay VAT for all EU B2C distance sales through that single registration. Eliminates the need to register separately in every customer's country.
179 
180[T2] If client makes significant B2C sales across EU: flag for reviewer to assess OSS registration requirement.
181 
182---
183 
184## Section 7: EC Sales List / Recapitulative Statement [T1]
185 
186**Legislation:** Directive 2006/112/EC, Articles 262-265
187 
188Every VAT-registered business that makes intra-community supplies (ICA or B2B services under Article 44) must file an EC Sales List (called Recapitulative Statement in the Directive) reporting:
189- Customer VAT numbers
190- Total value supplied to each customer
191- Period covered
192 
193Filing frequency and format varies by country -- check country skill.
194 
195---
196 
197## Section 8: Local Consumption Exception [T1]
198 
199**Legislation:** Directive 2006/112/EC, Articles 52-54 (services); Article 32 (goods)
200 
201When a business pays for services consumed locally in another EU country (hotel, restaurant, taxi, conference admission), the VAT is charged locally by the supplier at their national rate. This is NOT reverse charge.
202 
203Examples:
204- Employee stays in a Paris hotel -- French VAT charged, not reverse charge
205- Delegate attends a Berlin conference -- German VAT charged, not reverse charge
206- Business lunch in Amsterdam -- Dutch VAT charged, not reverse charge
207 
208The foreign VAT paid is an expense (generally irrecoverable unless the business files a cross-border VAT refund claim under Directive 2008/9/EC).
209 
210[T2] Cross-border VAT refund claims: possible for EU businesses but requires separate process. Flag for reviewer if amounts are material.
211 
212---
213 
214## Section 9: Import of Physical Goods from Non-EU [T2]
215 
216**Legislation:** Directive 2006/112/EC, Articles 70-71; national customs legislation
217 
218When physical goods are imported from outside the EU:
219- Import VAT is charged at the border by Customs, not via reverse charge on the VAT return
220- Import VAT is paid to Customs at the point of entry
221- The business recovers import VAT as input tax via the VAT return (using the Customs entry document)
222- Reverse charge on the VAT return is NOT used for physical goods imports
223 
224[T2] Process and documentation varies by country. Flag for reviewer to confirm: (a) client has the customs entry document, (b) import VAT amount is correct, (c) recovery is allowable.
225 
226---
227 
228## Section 10: VAT Number Validation [T1]
229 
230**Legislation:** Directive 2006/112/EC, Article 18
231 
232Before applying zero rate (ICA or B2B services):
233- Verify the customer's VAT number is valid using the EU VIES system: https://ec.europa.eu/taxation_customs/vies/
234- A valid VAT number is a prerequisite for zero-rating
235- If VIES validation fails, do not zero-rate -- apply local VAT rate
236 
237---
238 
239## Section 11: Blocked Categories -- Common EU Rules [T1/T2]
240 
241**Legislation:** Directive 2006/112/EC, Articles 176-177
242 
243The Directive permits member states to maintain restrictions on input tax deduction that existed before 1979 (standstill clause). As a result, blocked categories vary significantly by country.
244 
245Common categories blocked in most EU member states [T1]:
246- Entertainment expenses (client meals, hospitality)
247- Personal use items
248 
249Categories blocked in some but not all member states [T2]:
250- Motor vehicles (blocked in some, partially allowed in others)
251- Fuel (varies by country and vehicle type)
252- Accommodation (varies)
253 
254**Always check the country skill for the specific blocked categories for that jurisdiction.**
255 
256---
257 
258## Section 12: Invoicing Requirements [T1]
259 
260**Legislation:** Directive 2006/112/EC, Articles 219a-237
261 
262Mandatory invoice elements for all EU member states:
263- Date of issue
264- Sequential invoice number
265- Supplier VAT number
266- Customer VAT number (for B2B intra-community supplies)
267- Full name and address of supplier and customer
268- Description of goods or services
269- Date of supply (if different from invoice date)
270- Taxable amount per VAT rate
271- VAT rate applied
272- VAT amount in the currency of the invoice
273- For zero-rated intra-community supplies: reference to exemption (Article 138 or 44/196)
274- For reverse charge: statement "Reverse charge"
275 
276[T2] E-invoicing mandates vary by country and are being introduced progressively across the EU. Check country skill for any mandatory e-invoicing requirements.
277 
278---
279 
280## PROHIBITIONS
281 
282- NEVER zero-rate an intra-community supply without a valid customer VAT number verified on VIES
283- NEVER apply reverse charge to services consumed locally in another EU country (hotel, restaurant, taxi)
284- NEVER apply reverse charge to physical goods imports -- import VAT is handled via Customs
285- NEVER use this skill alone -- always load the country skill alongside it
286- NEVER override the country skill with this base skill -- the country skill takes precedence on all national specifics
287- NEVER present EU-wide rules as applying without exception -- national derogations exist and are significant
288 
289---
290 
291## Gap Report
292 
293| Area | Status |
294|------|--------|
295| Core Directive rules | T1 -- sourced from EUR-Lex consolidated text |
296| 2026 rate table | T1 -- sourced from European Commission TEDB and multiple verified sources |
297| OSS / IOSS detail | T2 -- covered at high level only; detailed country implementation in country skills |
298| Intrastat thresholds | T3 -- not covered; varies by country; add to country skills |
299| SAF-T / e-invoicing mandates | T3 -- not covered; varies significantly by country |
300| VAT groups | T3 -- not covered; varies by country |
301| Capital goods adjustment period | T3 -- varies by country; covered in country skills |
302 
303**Practitioner review required for:** rate table accuracy (verify against EC TEDB), any T2 rules before advising clients.
304 

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Tier 2 EU regional layer containing Council Directive 2006/112/EC content, Implementing Regulation 282/2011, and harmonized concepts across all 27 EU member states. Required foundation for any EU member state VAT skill.

EUty-2025

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