EU intra-community VAT on B2B services: clear 2026 guide

2B services invoice goes out at 0% VAT if the client is on VIES and gets reported on Modelo 349. When the reverse charge applies, what Form 349 reports, how a Spanish autonomo invoices a German or Irish company, and what changes with a non-EU client. Plain-language guide for B2B services.

If you are a Spanish autonomo or SME with corporate clients in other EU countries, intra-community VAT is one of the most confusing areas. The general rule for B2B services is simple: you invoice without charging VAT and the client self-assesses it in their country. But there are important nuances that separate a clean invoice from one rejected on inspection. This guide explains when the rule really applies, how to register in the ROI, what to declare on Forms 303 and 349 and the mistakes that cost adjustments. Breathe: at Exentax this is routine, we bring you up to date and the next review closes in one round, no drama.

B2B services: general rule and exceptions

Article 69 of Spain's VAT Law establishes that in intra-community B2B services the transaction is located at the recipient. So if you sell advisory to a French company, the operation is taxed in France and you issue the invoice without Spanish VAT. Relevant exceptions: services connected to immovable property (taxed where the property sits), passenger transport (where it takes place), restaurant and catering (place of consumption) and in-person cultural or educational services (event location). Reviewing each operation matters because misclassification is one of the most common mistakes.

Intra-Community Operators Register and VIES

To invoice without VAT to an EU client you must register in Spain's Intra-Community Operators Register (ROI), which gives you an EU VAT number with ES prefix. The client must also hold a valid VIES number in their country. Before each intra-community invoice it pays to check the client's number on the European Commission VIES portal. If the client has no valid VIES, you cannot apply the reverse charge and must charge Spanish VAT, which changes the operation and often blocks invoice acceptance.

How to fill out the VAT-free invoice

The invoice must show your Spanish EU VAT number (with ES prefix), the client's EU VAT number, the amount without VAT and the mandatory mention of Article 84 of the Spanish VAT Law (operation with reverse charge) or its English equivalent (reverse charge). No VAT base or amount is included; only the total. Some European clients also require reference to Directive 2006/112/EC. Always keep electronic proof of sending and delivery of the service (emails, contracts, deliverables) because in an inspection the Spanish Tax Agency demands full documentary trails, not only the invoice. Breathe: at Exentax this is routine, we bring you up to date and the next review closes in one round, no drama.

Form 349 and Form 303 reconciliation

Intra-community operations are declared on Form 349 (informative), monthly or quarterly depending on volume. The accrual date is the last day of the month the service was rendered. On Form 303, B2B intra-community operations go into the boxes for transactions not subject to VAT but with right to deduct input VAT. Inconsistency between Forms 303 and 349 is among the mistakes that most quickly trigger review: both forms must reconcile quarter by quarter and, above all, in the annual summary on Form 390.

B2C clients and digital services: OSS

If your client is not a business but a final consumer in another EU country, the reverse charge does not apply. For electronically supplied services (online courses, downloadable software, ebooks, music) the operation is taxed in the consumer's country from the first euro. To manage this without opening VAT registrations in every country, the One Stop Shop (OSS) is available in Spain, where you declare all EU B2C sales on a single quarterly form with country-by-country and VAT-rate breakdown. The Spanish Tax Agency acts as single window and distributes the money to the other Member States.

When a US LLC simplifies the workflow

For freelancers whose clients are mostly US-based or outside the EU, a US LLC dramatically simplifies the workflow: invoices to US clients go out without VAT by default (no federal VAT in the US) and Form 349 disappears. For EU B2B clients, the LLC invoices from the US under the general rule for services provided by a foreign supplier, usually subject to the reverse charge mechanism at the client's location. VAT management is drastically reduced.

The legal framework is set out in Spain's VAT Law 37/1992 and Directive 2006/112/EC. For real-time VIES validation, use the European Commission portal.

Practical cases with real numbers

Case 1. Spanish IT advisor with French client. You invoice a 5,000€ project to a Paris-based company. Your Spanish EU VAT number is active in VIES, so is the client's. You issue an invoice for exactly 5,000€ with the mention "reverse charge, art. 84 LIVA". On Spanish form 349 you declare 5,000€ as intra-community service supply; on form 303, box 59 (intra-community supplies). The French client self-assesses French VAT. You don't pay VAT in Spain on this transaction; you do declare the income on personal income tax.

Case 2. Web designer with German client without valid VIES. The German client appears as an individual, with no registered VAT number. The transaction counts as B2C: localised at the supplier's seat (Spain) up to the OSS threshold, then at client's seat. If your annual EU B2C sales are below €10,000, you charge 21% Spanish VAT. Above the threshold, you tax in Germany at 19% via OSS. Key decision: always check VIES before issuing.

Case 3. Marketing agency with mixed Spain B2B + EU clients. 70% of revenue is Spain-based (with 21% VAT), 30% EU B2B (no VAT due to reverse charge). Typical result: input VAT prorating is calculated on the total. Spain's tax authority allows intra-community transactions with right to deduct, so input VAT on overheads (rent, software, tools) is fully deductible. Mandatory reconciliation between forms 303 and 349 each quarter.

Mistakes that trigger audits

Frequently asked questions

Do I have to charge VAT if my client is a UK company post-Brexit? No. The UK is outside the EU intra-community regime. The transaction is treated as a service export outside the EU: invoice without VAT with the mention "operation not subject, art. 69.Uno LIVA". Not declared on form 349, but reported on form 303 (specific exports box).

When is ROI registration mandatory? Before your first intra-community operation. The Spanish tax authority can take several weeks to validate the registration, and until your EU VAT number appears in VIES, you cannot issue reverse charge invoices. Apply with margin before your first service.

What if my EU client withholds VAT by mistake? Common: clients unfamiliar with the regime apply local VAT thinking the transaction is B2C. Solution: issue a credit note, refund the VAT charged, and educate the client about reverse charge. Keep written correspondence in case AEAT asks.

Does a US LLC release me from form 349? If the LLC is a non-resident for Spanish tax purposes, yes. The LLC invoices from the US and files no Spanish forms (it does file US compliance: 5472, BOI). The Spanish tax resident declares the LLC's net profits on personal income tax as foreign business income. Drastically reduces EU VAT paperwork.

Operational checklist before each invoice

✓ Check the client's VIES on the EC portal and save proof.
✓ Verify your Spanish EU VAT number is active (consult AEAT).
✓ Confirm the service falls under the general rule (art. 69 LIVA): not real estate, not passenger transport, not in-person events.
✓ Include the mention "reverse charge, art. 84 LIVA".
✓ Charge the amount without VAT, keep deliverables and communications.
✓ Transfer to the quarterly or monthly form 349.
✓ Reconcile the summary with form 303 and review annual coherence with form 390.

How to read intra-EU VAT on services as a stable mapping rather than as a recurring case-by-case debate

Intra-EU VAT on services reads more usefully when it's treated as a stable mapping between the country of the supplier, the status of the customer (VAT-registered business or final consumer) and the country where the service is consumed, than as a recurring case-by-case debate. The mapping doesn't change month to month.

Why the note is organized by service type and not by individual invoice

The note is organized by service type and not by individual invoice — the applicable VAT rule depends on the service type and the customer's status, not on each invoice in isolation, and this view keeps the right granularity for an annual review.

Before going further, put numbers on your case: the Exentax calculator compares, in under 2 minutes, your current tax bill with what you would carry running a US LLC properly declared in your country of residence.

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At Exentax we review your case with real data and tell you whether changing structure pays off. book a free consultation of 30 minutes and you leave with a clear plan.

How we close this with the Exentax method

What we see every week in the files that reach us is the same pattern: the question stays as loose ideas, the decision gets postponed and, by the time the tax year closes, people pay more than needed or take on risks that do not pay off. The problem is rarely the rule itself; it is the lack of a written plan with real numbers, owned by someone who understands the case end to end.

What people get wrong

Copying structures seen on social media without modelling their own case against real income, residency and client mix.
Mixing personal money with business cash flow and losing the documentary trail any audit will ask for.
Leaving execution to generic accountants who only file forms, without thinking through the annual strategy or the total cost.

What actually works

Modelling the situation in the Exentax calculator before moving a single piece, to see the total annual cost and not just today's bill.
Separating personal and business flows from day one, with distinct accounts and a living checklist of evidence.
Working with an advisor who sees the pieces together: structure, banking, compliance and residency, not each one in isolation.

If you want to move from doubt to plan, book 30 minutes with Exentax and we walk out of the call with the numbers closed and an operational calendar.

What if HMRC, the IRS or my local tax authority asks about my LLC?

It's the question every client raises in the first consultation, and the short answer is: your LLC isn't opaque, and a properly declared structure closes any inquiry in standard forms. Your tax authority can request the state Certificate of Formation (Wyoming, Delaware or New Mexico), the EIN issued by the IRS, the signed Operating Agreement, the Mercury or Wise statements for the year, the Form 5472 plus pro-forma 1120 you filed, and the bookkeeping that reconciles income, expenses and movements. If all of that exists and is delivered in order, the inquiry doesn't escalate.

What tax authorities do pursue, and rightly, is sham ownership (nominees, paper residency) and undeclared foreign accounts. A well-structured LLC is the opposite: you appear as beneficial owner in the BOI Report when applicable (verifiable at fincen.gov/boi), you sign the bank accounts and you declare the income where you actually live. The structure is registered with the state Secretary of State, with the IRS and, when European banks are involved, inside the CRS perimeter of the OECD standard.

The mistake that really sinks an inquiry isn't having an LLC; it's not attributing the income correctly in your domestic return, not declaring foreign accounts when the year-end balance exceeds the local threshold (€50,000 in Spain via Modelo 720; the equivalent FBAR / Form 8938 in the US for residents; T1135 in Canada), and not documenting related-party transactions between the member and the LLC. Those three fronts are worth closing before any request arrives, not after.

## What an LLC does NOT do

- It does not exempt you from tax in your country of residence. If you live in Spain, France, Germany or Portugal, you are taxed there on worldwide income. The LLC organises your US side (zero federal tax for non-resident SMLLC pass-through, absent Effectively Connected Income); it does not switch off your domestic taxation. The income tax is computed on the attributed profit, not on the dividends actually paid.

- It is not an offshore vehicle or a BEPS scheme. It is a US entity recognised by the IRS, registered in a specific state with physical address, registered agent and annual informational filings. Classic offshore jurisdictions (BVI, Belize, Seychelles) leave no public trace; an LLC leaves a trace in five different places.

- It does not protect you if you commingle funds. The pierce the corporate veil doctrine kicks in as soon as a judge sees the LLC and the member behaving as the same wallet: mixed accounts, personal expenses paid from the LLC, no signed Operating Agreement, no bookkeeping. Three suspicious transactions are enough.

- It does not save you social security contributions at home. If you are self-employed in Spain, France or Germany, your monthly social contribution remains identical. The LLC handles the trading side with international clients; your personal contribution is independent.

- It does not exempt you from declaring foreign accounts. Spain residents file Modelo 720 / 721; UK residents, the SA106; Portugal residents, the Anexo J of Modelo 3 IRS; Germany residents, the Anlage AUS. Those obligations belong to the individual, not to the LLC.

At Exentax we cover those five fronts every year alongside the US federal calendar (Form 5472, pro-forma 1120, FBAR, state Annual Report and BOI Report when applicable). The goal is that no inquiry finds a loose end and that the structure withstands a 5-to-7-year retroactive review.

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For state-specific details, see our Wyoming LLC service page with closed costs and timelines.

How to ensure VIES registration arrives on time

Registration in the Intra-Community Operators Register (ROI) is requested via Form 036 and may take up to three months to be confirmed. In our practice, the most common operational pain is the freelancer issuing an intra-Community invoice without a VAT number that is yet active in VIES, which produces an immediate compliance gap that the EU client's accounting team will flag. The clean approach is to register via Form 036 well before the first European client invoice is expected (we recommend ninety days of buffer), to monitor the VIES portal for activation, and to keep a screenshot of the active registration on file as the proof attached to the first invoice when the client requests it. The second operational pain is allowing the registration to lapse through inactivity (no intra-Community operations for several quarters); the registration can be deactivated and a fresh request will be needed before the next European client. A quarterly check on VIES activation status is enough to avoid both pains.

Three real-world invoicing patterns and the documentation each one requires

The first pattern is the freelancer issuing a B2B services invoice to an EU-resident company with an active VIES number: invoice without VAT, mention "reverse charge", report on quarterly Form 349, and reflect on Form 303 in the corresponding box. The documentation kit per invoice is the client's VIES validation screenshot dated on the invoice date, the contract or order, and the proof of payment. The second pattern is the freelancer issuing a B2C digital services invoice to an EU consumer below the EUR 10,000 annual threshold: Spanish VAT applies as if the consumer were Spanish; the documentation kit is the consumer's location proof (IP plus billing address) and the standard invoice. The third pattern is the freelancer issuing a B2C digital services invoice to an EU consumer above the threshold (or having opted into OSS): VAT of the consumer's country applies, declared via the OSS quarterly return, with the documentation kit including the consumer's location proof, the OSS registration confirmation and the OSS quarterly receipt. Keeping the three kits ready in templates avoids ad-hoc reconstruction at quarter-end.

How the Form 349 timing aligns with the rest of the quarter

Form 349 is the recapitulative declaration of intra-Community operations, filed monthly or quarterly depending on volume. For most freelancers in our practice, the quarterly version applies, with the same calendar as Form 303 (VAT) and Form 130 (IRPF advance), so the three filings are processed in the same closing window. The clean approach we recommend is to align the quarterly closing on a fixed day each month (we use the second working day of January, April, July and October as the closing reference), to file Form 303 first, then Form 349 against the operations registered for the quarter, and to keep both receipts in the same folder for that quarter. The arithmetic between the two forms must reconcile: the intra-Community services declared on Form 349 should equal the corresponding box of Form 303; any mismatch will produce a routine AEAT request for clarification.

How OSS reshapes the calendar for B2C digital flows

When the freelancer has opted into the One-Stop Shop (OSS) for B2C digital services to EU consumers, the quarterly OSS return becomes a fourth filing aligned with the others, but with its own calendar (one month after the quarter end, with no extension). The OSS return covers the VAT collected per consumer-country, paid in a single Spanish account, and redistributed by the AEAT to each EU country. The discipline we keep with clients on OSS is to maintain a per-country tally each quarter (consumer location, VAT rate of the country, amount), to reconcile the tally against the bookkeeping at quarter end, and to file the OSS return before the rest of the quarterly closings. The most common pitfall is treating OSS as optional during a slow quarter and skipping the filing because "there's nothing to declare"; once registered in OSS, the freelancer must file every quarter, even at zero, otherwise the registration is at risk of being cancelled and a re-registration creates several months of administrative gap.

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