Customer invoicing for online sellers in the EU is very different to invoicing customers in the UK.
A customer invoice is what is issued from a seller to a buyer relating to the sale of products or services online or not.
When invoicing a customer you first must check if the customer is based in one of the EU member states. There are 28 EU member states which can be found here.
The information that should be on an invoice are:
- The date of issue
- A unique number for the invoice
- The full name and address of the company selling the goods
- The customers full name and address
- The description of the goods/services sold
- The quantity of goods/services sold
- The date and place of supply
- The total amount payable
If the customer is VAT registered, you must also include:
- VAT number
- Customer VAT number
- The VAT rate
- The taxable amount
- The VAT amount
- Whether the goods/services are VAT exempt or zero-rated.
You must always issue an invoice anytime you supply goods/services or receive payment. This must be done either on paper or electronically
For UK TAX and VAT you must keep all customer invoices for at least six years.
If you are a VAT MOSS (Mini One Stop Shop), you must keep the records for ten years.
MOSS services are for businesses that sell digital services.
Invoices can be stored anywhere but they must be readable and accessible. The local tax office can visit your business at anytime and request for them.
Not registered for VAT?
If you are not registered for VAT, you should never charge VAT on your invoices.
Registered for VAT?
Majority of the sales to another EU member state are exempt from VAT due to the EU VAT Directive Article 138. When VAT is exempt it means that the VAT is zero 0%.
If your registered for VAT and selling goods to a customer who is not VAT registered you must charge VAT.
Whenever you are selling goods to a customer who has a VAT ID, you do not need to charge VAT as the customer is then responsible for paying VAT.
What currency are you being paid in for the invoice?
This is extremely important as being paid in another currency outside of your local currency can cause for your bank to charge for the conversion. This is where things can get very complicated.