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| 1 | --- |
| 2 | name: vat-place-of-supply-master |
| 3 | description: > |
| 4 | The definitive place-of-supply reference for cross-border VAT on services and goods. |
| 5 | Use when the user asks about: place of supply, where is VAT due, which country's VAT, |
| 6 | Art 44, Art 45, B2B place of supply, B2C place of supply, immovable property VAT, |
| 7 | transport VAT, electronically supplied services place of supply, distance selling, |
| 8 | chain transactions, triangulation, OSS decision tree, IOSS, intra-EU supply, |
| 9 | import VAT, Art 47, Art 48, Art 53, Art 55, Art 56, Art 58, Art 31, Art 32, Art 33, |
| 10 | Art 36a, US sales tax nexus, Australian GST on imports, India OIDAR, Japan consumption tax, |
| 11 | freelancer cross-border VAT, "where do I charge VAT", or any question about determining |
| 12 | the correct country for VAT/GST on a cross-border transaction. |
| 13 | version: 1.0 |
| 14 | jurisdiction: INTL |
| 15 | tax_year: 2025-2026 |
| 16 | category: cross-border |
| 17 | --- |
| 18 | |
| 19 | # VAT Place of Supply — Master Reference for Cross-Border Transactions |
| 20 | |
| 21 | > **Disclaimer:** This skill provides general guidance on VAT/GST place-of-supply rules. These rules are complex, jurisdiction-specific, and subject to change. Consult a qualified indirect tax advisor before taking positions on VAT obligations. |
| 22 | |
| 23 | --- |
| 24 | |
| 25 | ## Skill Metadata |
| 26 | |
| 27 | | Field | Value | |
| 28 | |-------|-------| |
| 29 | | Jurisdiction | EU (all 27 member states) + non-EU comparison | |
| 30 | | Primary Legislation | Council Directive 2006/112/EC, Articles 31–59c | |
| 31 | | Supporting Legislation | Council Implementing Regulation (EU) No 282/2011 | |
| 32 | | Scope | Determining the correct country for VAT on cross-border supplies of goods and services | |
| 33 | | Contributor | OpenAccountants | |
| 34 | | Validation Date | May 2026 | |
| 35 | | Skill Version | 1.0 | |
| 36 | | Cross-references | `eu-reverse-charge.md`, `eu-oss-digital.md`, `non-eu-export-services.md`, `cross-border-vat-gst.md` | |
| 37 | |
| 38 | --- |
| 39 | |
| 40 | ## Section 1: General Rules for Services |
| 41 | |
| 42 | **Legislation:** VAT Directive 2006/112/EC, Articles 44 and 45. |
| 43 | |
| 44 | There are two basic rules. Every service starts here before checking exceptions. |
| 45 | |
| 46 | ### Article 44 — B2B General Rule [T1] |
| 47 | |
| 48 | | Element | Rule | |
| 49 | |---------|------| |
| 50 | | Customer | Taxable person acting as such (business with VAT number) | |
| 51 | | Place of supply | Where the **customer** is established (or has a fixed establishment receiving the service) | |
| 52 | | VAT consequence | Supplier invoices without VAT; customer self-assesses under reverse charge (Art 196 within EU) | |
| 53 | | Verify | Customer's VAT number via VIES before zero-rating | |
| 54 | |
| 55 | ### Article 45 — B2C General Rule [T1] |
| 56 | |
| 57 | | Element | Rule | |
| 58 | |---------|------| |
| 59 | | Customer | Non-taxable person (private individual) | |
| 60 | | Place of supply | Where the **supplier** is established (or has a fixed establishment from which the service is supplied) | |
| 61 | | VAT consequence | Supplier charges their own country's VAT rate | |
| 62 | | Exception | Numerous special rules override Art 45 for specific service types (see Section 2) | |
| 63 | |
| 64 | ### Quick Reference |
| 65 | |
| 66 | | Scenario | Place of Supply | Who Accounts for VAT | |
| 67 | |----------|----------------|---------------------| |
| 68 | | B2B general service | Customer's country | Customer (reverse charge) | |
| 69 | | B2C general service | Supplier's country | Supplier | |
| 70 | |
| 71 | --- |
| 72 | |
| 73 | ## Section 2: Special Rules for Services |
| 74 | |
| 75 | These override the general rules above. Always check whether an exception applies before defaulting to Art 44/45. |
| 76 | |
| 77 | ### 2.1 Immovable Property — Article 47 [T1] |
| 78 | |
| 79 | | Rule | Detail | |
| 80 | |------|--------| |
| 81 | | Applies to | Valuation, estate agency, legal services related to property, construction, accommodation, property management, architect services | |
| 82 | | Place of supply | Where the **property is located** — regardless of B2B/B2C and regardless of where supplier or customer is | |
| 83 | | Practical impact | A German architect designing a building in Portugal must charge Portuguese VAT (or register there), even if the client is in Ireland | |
| 84 | | Common trap | Freelancers forget that remote design work for foreign property still follows this rule | |
| 85 | |
| 86 | ### 2.2 Passenger Transport — Article 48 [T1] |
| 87 | |
| 88 | | Rule | Detail | |
| 89 | |------|--------| |
| 90 | | Place of supply | Where the transport takes place, **proportional to distances covered** in each country | |
| 91 | | B2B/B2C | Same rule applies to both | |
| 92 | | Example | A bus journey from Belgium through Luxembourg to Germany: VAT is split proportionally across all three countries | |
| 93 | |
| 94 | ### 2.3 Goods Transport (B2C only) — Article 49 [T2] |
| 95 | |
| 96 | | Rule | Detail | |
| 97 | |------|--------| |
| 98 | | Place of supply | Where the transport takes place, proportional to distances | |
| 99 | | B2B | Art 44 applies instead (customer's country) | |
| 100 | | B2C intra-EU | Place where transport begins, unless transport is between two member states — then destination | |
| 101 | |
| 102 | ### 2.4 Cultural, Artistic, Sporting, Scientific, Educational, Entertainment Events — Articles 53–54 [T2] |
| 103 | |
| 104 | | Scenario | Article | Place of Supply | |
| 105 | |----------|---------|----------------| |
| 106 | | B2B — admission to an event | Art 53 | Where the event **physically takes place** | |
| 107 | | B2C — admission and related services | Art 54 | Where the event physically takes place | |
| 108 | | B2B — services other than admission (e.g., organising, production) | Art 44 | Customer's country (general rule) | |
| 109 | |
| 110 | **Key distinction:** "Admission" means the right to attend. Organising or sponsoring an event for a business client follows the general B2B rule (Art 44), not the event location rule. |
| 111 | |
| 112 | ECJ case C-647/17 (*Srf konsulterna*): A seminar involving active participation for a business client is a B2B service under Art 44, not "admission" under Art 53. |
| 113 | |
| 114 | ### 2.5 Restaurant and Catering Services — Article 55 [T1] |
| 115 | |
| 116 | | Rule | Detail | |
| 117 | |------|--------| |
| 118 | | Place of supply | Where the services are **physically carried out** | |
| 119 | | On board transport | See Art 57 — place of supply = point of departure within EU | |
| 120 | | B2B/B2C | Same rule for both | |
| 121 | |
| 122 | ### 2.6 Short-Term Hire of Transport — Article 56 [T1] |
| 123 | |
| 124 | | Hire Duration | Place of Supply | |
| 125 | |--------------|----------------| |
| 126 | | Short-term (≤30 days; ≤90 days for vessels) | Where the means of transport is **put at the customer's disposal** | |
| 127 | | Long-term B2B | Customer's country (Art 44) | |
| 128 | | Long-term B2C | Supplier's country (Art 45), except pleasure boats = where put at disposal if supplier established there | |
| 129 | |
| 130 | ### 2.7 Electronically Supplied Services, Telecoms, Broadcasting (B2C) — Article 58 [T1] |
| 131 | |
| 132 | | Rule | Detail | |
| 133 | |------|--------| |
| 134 | | Applies to | SaaS, downloads, streaming, e-books, online courses (pre-recorded), cloud hosting, telecoms, broadcasting — B2C only | |
| 135 | | Place of supply | Where the **customer** is established / resides | |
| 136 | | B2B | Art 44 applies instead (customer's country, reverse charge) | |
| 137 | | EUR 10,000 threshold (Art 59c) | EU-established sellers below €10,000 total cross-border B2C digital sales may charge home-country VAT | |
| 138 | | Non-EU sellers | No threshold benefit; must always charge destination-country rate | |
| 139 | | Compliance | Use OSS (One-Stop Shop) to report across all EU countries from a single registration | |
| 140 | |
| 141 | ### 2.8 "Listed Services" to Non-EU Consumers (B2C) — Article 59 [T1] |
| 142 | |
| 143 | Certain services supplied B2C to a person **outside the EU** are taxed where the customer is — making them outside the scope of EU VAT: |
| 144 | |
| 145 | - Intellectual property / copyright licensing |
| 146 | - Advertising |
| 147 | - Consulting, legal, accounting, engineering |
| 148 | - Data processing, information supply |
| 149 | - Banking, financial, insurance services |
| 150 | - Staff supply |
| 151 | - Hiring of movable tangible property (except transport) |
| 152 | - Telecoms, broadcasting, electronically supplied services |
| 153 | |
| 154 | **If the B2C service is NOT on this list** (e.g., personal services, cleaning, yoga instruction): place of supply remains the supplier's country under Art 45, even if the consumer is outside the EU. |
| 155 | |
| 156 | --- |
| 157 | |
| 158 | ## Section 3: Rules for Goods |
| 159 | |
| 160 | ### 3.1 Domestic Supply — No Transport (Article 31) [T1] |
| 161 | |
| 162 | | Rule | Detail | |
| 163 | |------|--------| |
| 164 | | Place of supply | Where the goods are **located at the time of supply** | |
| 165 | | Example | Goods sold in a German shop to a walk-in customer: German VAT | |
| 166 | |
| 167 | ### 3.2 Goods Dispatched or Transported (Article 32) [T1] |
| 168 | |
| 169 | | Rule | Detail | |
| 170 | |------|--------| |
| 171 | | Place of supply | Where the goods are located when **dispatch or transport to the customer begins** | |
| 172 | | Example | German warehouse ships goods to a German customer: place of supply = Germany | |
| 173 | | Exception | Distance selling rules (Art 33) and installation/assembly (Art 36) override this | |
| 174 | |
| 175 | ### 3.3 Intra-EU Distance Selling (Article 33) [T1] |
| 176 | |
| 177 | | Rule | Detail | |
| 178 | |------|--------| |
| 179 | | What | Goods sold to consumers (B2C) or non-VAT-registered entities in another EU country | |
| 180 | | Place of supply | Where dispatch or transport **ends** (customer's country) | |
| 181 | | EUR 10,000 threshold (Art 59c) | EU sellers below €10,000 total cross-border B2C goods + digital services may treat place of supply as origin country | |
| 182 | | Above threshold | Must charge destination-country VAT rate | |
| 183 | | Compliance | Use Union OSS to report all intra-EU distance sales from one registration | |
| 184 | | Post-2021 change | Individual country thresholds (€35,000/€100,000) replaced by single €10,000 EU-wide threshold | |
| 185 | |
| 186 | ### 3.4 Imports from Outside the EU (Article 30/60-61) [T1] |
| 187 | |
| 188 | | Rule | Detail | |
| 189 | |------|--------| |
| 190 | | Place of importation | The EU member state where goods **enter the EU** (Art 60) | |
| 191 | | Suspensive arrangements | If goods are placed under customs warehousing or transit, importation occurs where goods **leave** that arrangement (Art 61) | |
| 192 | | VAT due | At importation, by the importer — collected by customs | |
| 193 | | IOSS alternative | For goods ≤€150 sold B2C, use Import One-Stop Shop to collect VAT at point of sale | |
| 194 | |
| 195 | ### 3.5 Installation or Assembly (Article 36) [T1] |
| 196 | |
| 197 | | Rule | Detail | |
| 198 | |------|--------| |
| 199 | | Place of supply | Where the goods are **installed or assembled** | |
| 200 | | Example | German manufacturer ships and installs machinery in a French factory: place of supply = France | |
| 201 | |
| 202 | ### 3.6 Chain Transactions (Article 36a) [T1] |
| 203 | |
| 204 | Introduced by Directive (EU) 2018/1910 to simplify chain (successive) supplies: |
| 205 | |
| 206 | | Element | Rule | |
| 207 | |---------|------| |
| 208 | | Scenario | Goods supplied A → B → C, shipped directly from A to C across EU borders | |
| 209 | | Transport attributed to | The supply **to** the intermediary operator (B) | |
| 210 | | Intermediary operator | A supplier in the chain (other than the first) who dispatches or arranges transport | |
| 211 | | Exception | If B communicates to A the VAT number issued by the dispatch member state, transport is attributed to B's supply to C | |
| 212 | | Effect | Only one supply in the chain is the intra-EU zero-rated supply; the other is a domestic supply | |
| 213 | |
| 214 | **Simplified triangulation (Art 141):** In a three-party chain A (MS1) → B (MS2) → C (MS3), B can avoid registering in MS3 if all conditions of Art 141 are met. B issues an invoice with "reverse charge" and C self-assesses VAT in MS3. |
| 215 | |
| 216 | --- |
| 217 | |
| 218 | ## Section 4: OSS / IOSS Decision Tree |
| 219 | |
| 220 | ### When to register for One-Stop Shop |
| 221 | |
| 222 | ``` |
| 223 | START: Do you sell goods or digital services B2C to consumers in other EU countries? |
| 224 | │ |
| 225 | ├─ NO → OSS not needed |
| 226 | │ |
| 227 | ├─ YES → Are you an EU-established business? |
| 228 | │ │ |
| 229 | │ ├─ YES → Do your total cross-border B2C sales (goods + digital services) |
| 230 | │ │ exceed EUR 10,000/year? |
| 231 | │ │ │ |
| 232 | │ │ ├─ NO → You MAY charge home-country VAT. OSS optional. |
| 233 | │ │ │ (But you can opt in to OSS voluntarily.) |
| 234 | │ │ │ |
| 235 | │ │ └─ YES → You MUST charge destination-country VAT. |
| 236 | │ │ Register for UNION OSS in your home country. |
| 237 | │ │ |
| 238 | │ └─ YES (established in >1 EU country) → EUR 10,000 threshold does NOT apply. |
| 239 | │ Register for Union OSS. |
| 240 | │ |
| 241 | └─ YES → Are you a NON-EU business? |
| 242 | │ |
| 243 | ├─ Selling digital services / telecoms / broadcasting B2C → |
| 244 | │ Register for NON-UNION OSS in any EU country of choice. |
| 245 | │ No threshold benefit. Always charge destination rate. |
| 246 | │ |
| 247 | └─ Selling goods from outside EU, consignments ≤EUR 150 → |
| 248 | Register for IOSS (Import One-Stop Shop). |
| 249 | Collect VAT at checkout. Goods enter EU VAT-paid. |
| 250 | Note: From 1 July 2026, EUR 3 flat customs duty also applies. |
| 251 | ``` |
| 252 | |
| 253 | ### OSS Comparison Table |
| 254 | |
| 255 | | Scheme | Who | What | Filing | |
| 256 | |--------|-----|------|--------| |
| 257 | | Union OSS | EU-established sellers | Intra-EU B2C distance sales of goods + B2C services in other EU states | Quarterly, home country | |
| 258 | | Non-Union OSS | Non-EU sellers | B2C digital/telecom/broadcasting services to EU consumers | Quarterly, any EU country | |
| 259 | | IOSS | Any seller (EU or non-EU) | Distance sales of imported goods ≤€150 to EU consumers | Monthly, home/chosen country | |
| 260 | |
| 261 | --- |
| 262 | |
| 263 | ## Section 5: Non-EU Rules Comparison |
| 264 | |
| 265 | ### 5.1 US Sales Tax Nexus |
| 266 | |
| 267 | | Aspect | US Rule | |
| 268 | |--------|---------| |
| 269 | | Tax type | Sales tax (state-level, not federal) | |
| 270 | | Place of supply equivalent | "Nexus" determines which state can tax you | |
| 271 | | Physical nexus | Office, warehouse, employee, or inventory in the state | |
| 272 | | Economic nexus (*South Dakota v. Wayfair*, 2018) | Most states: $100,000 in sales OR 200 transactions/year | |
| 273 | | Digital services | Taxability varies by state — SaaS taxable in ~25 states, not taxable in CA, GA, MO | |
| 274 | | No equivalent of reverse charge | Seller must collect and remit; no mechanism for buyer self-assessment in most states | |
| 275 | | Key difference from EU | No single national registration; must track nexus in 45+ states individually (or use automation like Stripe Tax, TaxJar, Avalara) | |
| 276 | |
| 277 | ### 5.2 Australian GST on Imports |
| 278 | |
| 279 | | Aspect | Australian Rule | |
| 280 | |--------|----------------| |
| 281 | | Threshold | AUD 75,000/year in supplies to Australian consumers | |
| 282 | | Digital services B2C | Non-resident must register for GST and charge 10% | |
| 283 | | Low-value goods (≤AUD 1,000) | GST applies at point of sale since July 2018 | |
| 284 | | B2B | Reverse charge applies (Australian business self-assesses) | |
| 285 | |
| 286 | ### 5.3 India OIDAR (Online Information and Database Access or Retrieval) |
| 287 | |
| 288 | | Aspect | Indian Rule | |
| 289 | |--------|-------------| |
| 290 | | Applies to | Non-resident suppliers of OIDAR services to non-taxable Indian recipients (B2C) | |
| 291 | | Definition | Services delivered over the internet — substantially automated, minimal human intervention | |
| 292 | | Rate | 18% IGST | |
| 293 | | Registration | Simplified registration under GST for non-resident OIDAR suppliers | |
| 294 | | B2B | Indian business self-assesses under reverse charge | |
| 295 | | Equalization Levy | Separate 2% levy on non-resident e-commerce operators (no global revenue threshold) | |
| 296 | |
| 297 | ### 5.4 Japan Consumption Tax on Digital Services |
| 298 | |
| 299 | | Aspect | Japanese Rule | |
| 300 | |--------|--------------| |
| 301 | | Rate | 10% (8% reduced rate for food/beverages, not applicable to digital) | |
| 302 | | Non-resident digital services B2C | Must register and charge JCT regardless of revenue | |
| 303 | | B2B | Reverse charge applies for "specified services" received from abroad | |
| 304 | | Threshold | No de minimis for non-resident digital service providers to consumers | |
| 305 | | Invoice system | Qualified Invoice System (QIS) since October 2023 — registered invoices required for input tax credit | |
| 306 | |
| 307 | ### Comparison Summary |
| 308 | |
| 309 | | Feature | EU | US | Australia | India | Japan | |
| 310 | |---------|----|----|-----------|-------|-------| |
| 311 | | Tax type | VAT | Sales tax | GST | GST + EL | JCT | |
| 312 | | B2B mechanism | Reverse charge | N/A | Reverse charge | Reverse charge | Reverse charge | |
| 313 | | B2C digital | Customer location | Nexus-based | Customer location | Customer location | Customer location | |
| 314 | | Single registration | OSS | No (per-state) | Single ATO reg | Single GST reg | Single NTA reg | |
| 315 | | Threshold (B2C digital) | €10,000 (EU sellers) | $100K/200 txn per state | AUD 75,000 | Nil (simplified reg) | Nil | |
| 316 | |
| 317 | --- |
| 318 | |
| 319 | ## Section 6: Practical Decision Flowchart for Freelancers |
| 320 | |
| 321 | **"I'm in Country A, my client is in Country B, and I'm providing [service type]. What VAT applies?"** |
| 322 | |
| 323 | ### Step 1: Classify the Supply |
| 324 | |
| 325 | | Question | If YES | If NO | |
| 326 | |----------|--------|-------| |
| 327 | | Are you selling **goods** (physical products)? | Go to Goods Flow (below) | Continue to Step 2 | |
| 328 | |
| 329 | ### Step 2: Identify the Customer |
| 330 | |
| 331 | | Question | If YES | If NO | |
| 332 | |----------|--------|-------| |
| 333 | | Is your client a **business** (with a VAT number)? | B2B → Go to Step 3 | B2C → Go to Step 4 | |
| 334 | |
| 335 | ### Step 3: B2B Service — Check Exceptions |
| 336 | |
| 337 | | Question | If YES | If NO | |
| 338 | |----------|--------|-------| |
| 339 | | Is the service related to **immovable property** (Art 47)? | VAT where property is located | Continue | |
| 340 | | Is the service **admission to an event** (Art 53)? | VAT where event takes place | Continue | |
| 341 | | Is it **short-term hire of transport** ≤30 days (Art 56)? | VAT where vehicle put at disposal | Continue | |
| 342 | | Is it **restaurant/catering** (Art 55)? | VAT where performed | Continue | |
| 343 | | Is it **passenger transport** (Art 48)? | VAT proportional to route | Continue | |
| 344 | | **None of the above?** | → **Art 44 applies.** Place of supply = client's country. Invoice without VAT. Client self-assesses (reverse charge in EU; self-assessment rules outside EU). | | |
| 345 | |
| 346 | ### Step 4: B2C Service — Check Exceptions |
| 347 | |
| 348 | | Question | If YES | If NO | |
| 349 | |----------|--------|-------| |
| 350 | | Is it an **electronically supplied service, telecoms, or broadcasting** (Art 58)? | VAT where consumer is located. Use OSS if selling into EU. | Continue | |
| 351 | | Is the service related to **immovable property** (Art 47)? | VAT where property is located | Continue | |
| 352 | | Is it **admission to an event** (Art 54)? | VAT where event takes place | Continue | |
| 353 | | Is the consumer **outside the EU** and is the service on the Art 59 list? | Outside scope of EU VAT | Continue | |
| 354 | | **None of the above?** | → **Art 45 applies.** Place of supply = YOUR country. Charge your domestic VAT rate. | | |
| 355 | |
| 356 | ### Goods Flow |
| 357 | |
| 358 | | Question | If YES | If NO | |
| 359 | |----------|--------|-------| |
| 360 | | Are you shipping goods to a **consumer in another EU country**? | Distance selling (Art 33). Above €10,000 threshold → destination VAT. Use Union OSS. | Continue | |
| 361 | | Are you shipping goods from **outside the EU** to EU consumers, value ≤€150? | Use IOSS. Collect destination VAT at checkout. | Continue | |
| 362 | | Are goods **installed/assembled** at customer location (Art 36)? | VAT where installed | Continue | |
| 363 | | Standard domestic or B2B intra-EU supply? | Art 31/32 (origin) or intra-EU zero-rated supply + acquisition tax in destination | | |
| 364 | |
| 365 | ### Common Freelancer Scenarios |
| 366 | |
| 367 | | You are in... | Client is in... | Service | Result | |
| 368 | |--------------|----------------|---------|--------| |
| 369 | | Germany | France | Web development (B2B) | Art 44. No German VAT. French client reverse-charges at 20%. | |
| 370 | | Germany | France | Web development (B2C) | Art 45. Charge German 19% VAT. (Not a digital service — bespoke human work.) | |
| 371 | | Germany | France | SaaS subscription (B2C) | Art 58. Charge French 20% VAT. Report via OSS. | |
| 372 | | Malta | US | Consulting (B2B) | Art 44. Place of supply = US. No Malta VAT. Outside scope. | |
| 373 | | Malta | US | Pre-recorded online course (B2C) | Art 58/59. Place of supply = US (outside EU). No Malta VAT. But check US sales tax nexus. | |
| 374 | | UK | Germany | Design services (B2B) | UK is outside EU. No UK VAT (outside scope). German client self-assesses under German domestic rules. | |
| 375 | | India | Australia | Software dev (B2B) | Zero-rated export under IGST. No IGST if LUT filed. Australian client reverse-charges GST. | |
| 376 | | US | EU consumers | SaaS product (B2C) | Must register for non-Union OSS. Charge each EU country's VAT rate. No threshold benefit. | |
| 377 | | France | Switzerland | Architecture for property in France | Art 47. Property in France → French VAT at 20%, regardless of client location. | |
| 378 | |
| 379 | --- |
| 380 | |
| 381 | ## PROHIBITIONS |
| 382 | |
| 383 | 1. **NEVER** default to Art 44 or Art 45 without checking the exceptions in Section 2. |
| 384 | 2. **NEVER** assume that all B2C services to foreign consumers are outside the scope of VAT. Only Art 59 "listed services" shift to the consumer's country for B2C. |
| 385 | 3. **NEVER** ignore the immovable property rule (Art 47). It overrides everything. |
| 386 | 4. **NEVER** apply the €10,000 threshold to non-EU sellers — they must always charge destination-country VAT. |
| 387 | 5. **NEVER** confuse "zero-rated" with "exempt." Zero-rated preserves input VAT recovery; exempt does not. |
| 388 | 6. **NEVER** skip VIES verification before zero-rating an intra-EU B2B supply. |
| 389 | 7. **NEVER** assume the same place-of-supply rules apply in all countries. Non-EU jurisdictions (US, Australia, India, Japan) have fundamentally different approaches. |
| 390 | |
| 391 | --- |
| 392 | |
| 393 | ## Edge Cases |
| 394 | |
| 395 | ### EC1 — Bespoke software vs. SaaS (ESS classification) [T2] |
| 396 | **Situation:** A developer builds custom software for a specific B2C client. Is this an electronically supplied service (Art 58)? |
| 397 | **Resolution:** Custom software development with significant human intervention is NOT an ESS. It is a standard service under Art 45 (B2C) or Art 44 (B2B). Pre-packaged SaaS delivered automatically IS an ESS. Flag for reviewer if the degree of customisation is unclear. |
| 398 | |
| 399 | ### EC2 — Remote worker creating PE risk [T2] |
| 400 | **Situation:** A UK freelancer works from Spain for 8 months serving UK clients. Does Spain become the "establishment" for place-of-supply purposes? |
| 401 | **Resolution:** If the freelancer becomes established in Spain (fixed establishment under Art 11 of Implementing Regulation 282/2011), the place of supply of their B2C services may shift to Spain. B2B services under Art 44 are unaffected (place of supply = client's country). Flag for reviewer — tax residency and PE risk should also be assessed. |
| 402 | |
| 403 | ### EC3 — Mixed digital and live service bundle [T2] |
| 404 | **Situation:** A course provider sells a package: pre-recorded videos (ESS) + live weekly coaching calls (not ESS) to an EU consumer. |
| 405 | **Resolution:** If a single composite supply, the principal element determines classification. If independent supplies, each follows its own rules. Pre-recorded = Art 58 (customer location). Live coaching = Art 45 (supplier location). Flag for reviewer to determine whether composite or independent. |
| 406 | |
| 407 | ### EC4 — Chain transaction with unknown intermediary role [T3] |
| 408 | **Situation:** A → B → C chain where goods ship directly from Poland to Portugal, but it is unclear whether B is the intermediary operator under Art 36a. |
| 409 | **Resolution:** Escalate. The attribution of transport determines which supply is zero-rated (intra-EU) and which is domestic. Incorrect attribution can cause double taxation or VAT loss. Requires review of contractual arrangements and Incoterms. |
| 410 | |
| 411 | --- |
| 412 | |
| 413 | ## Test Suite |
| 414 | |
| 415 | ### Test 1 — B2B consulting, Germany to France |
| 416 | **Input:** German consultant invoices French company (valid FR VAT number) EUR 5,000 for strategy consulting. |
| 417 | **Expected:** Art 44. Place of supply = France. No German VAT. Reverse charge. Supplier reports on ESL. |
| 418 | |
| 419 | ### Test 2 — B2C yoga class (non-listed service), Malta to US consumer |
| 420 | **Input:** Maltese instructor provides a private in-person yoga session in Malta to a US tourist. EUR 100. |
| 421 | **Expected:** Art 45. Not a listed service under Art 59. Place of supply = Malta. Charge Maltese VAT at 18%. |
| 422 | |
| 423 | ### Test 3 — B2C SaaS, US company to French consumer |
| 424 | **Input:** US SaaS company sells a EUR 20/month subscription to a French consumer. |
| 425 | **Expected:** Art 58. ESS B2C. Place of supply = France. Non-Union OSS required. Charge 20% French VAT. |
| 426 | |
| 427 | ### Test 4 — Architect, property in another country |
| 428 | **Input:** Italian architect designs a villa in Greece for a German client (B2B). EUR 15,000. |
| 429 | **Expected:** Art 47 (immovable property). Place of supply = Greece. Reverse charge does NOT apply under Art 196. Italian architect may need to register for Greek VAT. |
| 430 | |
| 431 | ### Test 5 — Distance selling, below threshold |
| 432 | **Input:** Spanish e-commerce seller ships EUR 8,000 of handmade goods to consumers across 5 EU countries. Prior year was EUR 7,000. |
| 433 | **Expected:** Below €10,000 threshold. May treat place of supply as Spain and charge Spanish VAT. OSS optional. |
| 434 | |
| 435 | ### Test 6 — Distance selling, above threshold |
| 436 | **Input:** Same seller now has EUR 15,000 in cross-border B2C goods sales. |
| 437 | **Expected:** Above threshold. Must charge destination-country VAT. Register for Union OSS. |
| 438 | |
| 439 | --- |
| 440 | |
| 441 | ## Official Sources |
| 442 | |
| 443 | - **EU VAT Directive (consolidated):** https://eur-lex.europa.eu/eli/dir/2006/112 |
| 444 | - **EC Place of Taxation guidance:** https://taxation-customs.ec.europa.eu/taxation/vat/vat-directive/place-taxation_en |
| 445 | - **EU OSS portal:** https://vat-one-stop-shop.ec.europa.eu |
| 446 | - **VIES VAT number validation:** https://ec.europa.eu/taxation_customs/vies/ |
| 447 | - **Implementing Regulation 282/2011:** https://eur-lex.europa.eu/eli/reg_impl/2011/282 |
| 448 | - **IOSS guidance (Irish Revenue):** https://www.revenue.ie (search "IOSS") |
| 449 | |
| 450 | --- |
| 451 | |
| 452 | ## Disclaimer |
| 453 | |
| 454 | This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. VAT rates, thresholds, and place-of-supply rules are subject to change. Always verify current rules with official sources and a qualified indirect tax advisor. |
| 455 | |
| 456 | *Data reflects 2025–2026 rules. OpenAccountants — open-source accounting skills for AI — info@openaccountants.com* |
| 457 |
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About
The definitive place-of-supply reference for cross-border VAT on services and goods. Use when the user asks about: place of supply, where is VAT due, which country's VAT, Art 44, Art 45, B2B place of supply, B2C place of supply, immovable property VAT, transport VAT, electronically supplied services place of supply, distance selling, chain transactions, triangulation, OSS decision tree, IOSS, intra-EU supply, import VAT, Art 47, Art 48, Art 53, Art 55, Art 56, Art 58, Art 31, Art 32, Art 33, Art 36a, US sales tax nexus, Australian GST on imports, India OIDAR, Japan consumption tax, freelancer cross-border VAT, "where do I charge VAT", or any question about determining the correct country for VAT/GST on a cross-border transaction.
INTLty-2025
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