European VAT Exemption

European VAT Exemption: Information for EU Business Customers

The VAT Reverse Charge Mechanism (B2B)

As an EU-based supplier, we are pleased to offer VAT exemption for qualifying Business-to-Business (B2B) transactions with customers established and VAT-registered in an EU Member State different from our own.

This exemption is applied through the VAT Reverse Charge Mechanism for Intra-Community Supply of Goods, a mandatory system under EU VAT law (specifically Article 138 of the VAT Directive 2006/112/EC).

How the Reverse Charge Works

Under this mechanism:

  • Seller (Us): We do not charge VAT on the invoice (0% VAT rate).
  • Buyer (Your Business): Your business is legally responsible for declaring and paying the VAT in your own Member State. You will then typically deduct this VAT in the same return, making the transaction effectively tax-neutral for you.

Seamless VAT Exemption with Sufio

We use the Sufio app to fully automate and ensure the compliance of this exemption process. Sufio handles the real-time VIES validation and guarantees that the resulting invoice is legally compliant with EU regulations.

Requirements for VAT Exemption

To qualify for the 0% VAT rate, your business must meet all of the following conditions:

  • 1. VAT-Registered Status: Your company must hold a valid VAT Identification Number issued by an EU Member State other than our Member State of dispatch.
  • 2. Valid VIES ID: Your VAT ID must be checked and validated successfully by the Sufio app using the VIES database.
  • 3. Intra-Community Supply: The goods must be physically shipped from our EU Member State to a different EU Member State where your business is established.

Sufio-Powered: Step-by-Step Guide to Get VAT Exemption

Follow these simple steps during your order process to ensure the Reverse Charge is correctly applied:

1. Enter Your VAT ID

  • Location: Look for the dedicated field labelled "VAT Registration Number" or similar. This field may appear on the Cart page, the Customer Account page, or during the Checkout process.
  • Format: Enter your full VAT Identification Number, including the two-letter country code (e.g., FR12345678901).

2. Automatic Validation

  • After entering your VAT ID and proceeding to the next step (e.g., clicking Checkout or saving your customer details), the Sufio app performs a real-time check against the official VIES database.

3. Review Your Total

  • If your VAT ID is valid and all conditions for the Reverse Charge are met, the system will automatically mark your customer profile as tax-exempt.
  • The tax will be removed, and your order total will display a 0% VAT rate before you confirm payment.

4. Receive Your Compliant Invoice

  • Immediately upon order completion, Sufio automatically generates a legally compliant, official VAT invoice.
  • The invoice will clearly state the zero-rated VAT status, your VAT ID, our VAT ID, and include the required text: "Reverse Charge Mechanism: Recipient liable for VAT."

Note: If validation fails, we are legally obliged to charge our local VAT rate. If you believe there is an error, please ensure your VAT ID is correctly registered on the VIES database before contacting our support team.

Important: Customer Responsibility & Compliance

  • Mandatory: It is the customer's legal responsibility to ensure the VAT ID provided is valid, accurate, and belongs to the purchasing entity.
  • Local Declaration: Your business is responsible for correctly reporting the acquisition of the goods in your local VAT return under the Reverse Charge rules.
  • Audit Trail: Sufio provides us with a clear audit trail of the VIES validation at the time of purchase, which is essential for our compliance records.

We highly recommend consulting with a local tax professional or accountant to ensure your business fully complies with the VAT laws in your country.