This blog explains what a VAT-compliant invoice is, when freelancers need to charge VAT, what information must be included, and how Merchant of Record (MoR) services like Remotify can simplify the process.
This guide is written specifically for freelancers working with European clients and follows EU VAT rules.
Freelancers across Europe often work with clients in different countries, currencies, and legal systems. While the work itself may be creative or technical, invoicing is a legal and financial task that must be handled carefully- especially when Value Added Tax (VAT) is involved.
If you issue invoices that are not VAT-compliant, you risk delayed payments, rejected invoices, penalties from tax authorities, or issues during audits.
VAT (Value Added Tax) is a consumption tax applied to goods and services in most European countries. While the customer ultimately pays VAT, the responsibility for charging, collecting, and reporting it usually falls on the seller- in this case, the freelancer.
For freelancers, VAT matters because:
Whether or not you need to charge VAT depends on several factors, including:
A VAT-compliant invoice is an invoice that includes all the information required by VAT laws in the relevant jurisdiction. In the European Union, VAT invoicing requirements are broadly harmonised, though some local variations exist.
In simple terms, a VAT-compliant invoice clearly shows:
If any required element is missing or incorrect, the invoice may be considered invalid for VAT purposes.
You typically need to issue VAT-compliant invoices if:
Even if you are not required to charge VAT (for example, under the reverse-charge mechanism), your invoice still needs to meet VAT documentation standards.
Below are the standard elements required on a VAT-compliant invoice under EU VAT Directive rules.
Each invoice must have a unique, sequential invoice number. This helps tax authorities track transactions.
Example:
Invoice No: RM-2026-014
The date when the invoice is issued must be clearly stated.
Example:
Invoice Date: 10 March 2026
Your invoice must include:
Example:
Supplier: Jane Doe Consulting
Address: 12 Rue de Lyon, 75012 Paris, France
VAT ID: FR123456789
Include your client’s:
Example:
Customer: ABC Software GmbH
Address: Friedrichstraße 45, 10117 Berlin, Germany
VAT ID: DE987654321
The services provided must be described clearly and specifically.
Avoid vague terms like “professional services.”
Example:
Description: Front-end web development services for March 2026
If the service was completed on a different date than the invoice date, this must be mentioned.
Example:
Date of Supply: 31 March 2026
The total amount before VAT must be clearly shown.
Example:
Net Amount: €2,000.00
State the VAT rate charged (e.g., 20%, 21%).
Example:
VAT Rate: 20%
Show the VAT amount separately from the net total.
Example:
VAT Amount: €400.00
The final amount the client must pay.
Example:
Total Payable: €2,400.00
Scenario:
A VAT-registered freelancer in France provides services to a VAT-registered company in Germany. The reverse-charge mechanism applies.
Invoice Notes:
Sample VAT Text:
VAT reverse-charged under Article 44 and Article 196 of the EU VAT Directive
VAT Line:
VAT Rate: 0%
VAT Amount: €0.00
Under the reverse-charge mechanism:
This usually applies when:
Even though VAT is not charged, the invoice must still be VAT-compliant.
Scenario:
A freelancer in Spain provides design services to a private individual in Italy.
Key Points:
Example VAT Line:
VAT Rate: 21%
VAT Amount: €315.00
Any of these can cause payment delays or compliance issues.
Managing VAT correctly becomes more complex when freelancers:
This is where a Merchant of Record service like Remotify becomes valuable.
As a Merchant of Record, Remotify:
For freelancers, this means:
While freelancers can choose to manage VAT themselves, the administrative work increases quickly as client locations expand. Mistakes are costly and time-consuming to fix.
Using a Merchant of Record allows freelancers to operate internationally while staying compliant without building their own payment and tax infrastructure.
A VAT-compliant invoice is not just a formality- it is a legal requirement for freelancers operating in Europe. Understanding what information must be included, when VAT applies, and how to handle cross-border transactions is essential for smooth payments and long-term business stability.
For freelancers who want to scale without managing VAT complexity, working with a Merchant of Record like Remotify can remove compliance stress and allow them to focus on delivering great work.
Disclaimer: This article is for informational purposes only and does not constitute tax or legal advice.
Freelancers across Europe often work with clients in different countries, currencies, and legal systems. While the work itself may be creative or technical, invoicing is a legal and financial task that must be handled carefully- especially when Value Added Tax (VAT) is involved.
If you issue invoices that are not VAT-compliant, you risk delayed payments, rejected invoices, penalties from tax authorities, or issues during audits.
VAT (Value Added Tax) is a consumption tax applied to goods and services in most European countries. While the customer ultimately pays VAT, the responsibility for charging, collecting, and reporting it usually falls on the seller- in this case, the freelancer.
For freelancers, VAT matters because:
Whether or not you need to charge VAT depends on several factors, including:
A VAT-compliant invoice is an invoice that includes all the information required by VAT laws in the relevant jurisdiction. In the European Union, VAT invoicing requirements are broadly harmonised, though some local variations exist.
In simple terms, a VAT-compliant invoice clearly shows:
If any required element is missing or incorrect, the invoice may be considered invalid for VAT purposes.
You typically need to issue VAT-compliant invoices if:
Even if you are not required to charge VAT (for example, under the reverse-charge mechanism), your invoice still needs to meet VAT documentation standards.
Below are the standard elements required on a VAT-compliant invoice under EU VAT Directive rules.
Each invoice must have a unique, sequential invoice number. This helps tax authorities track transactions.
Example:
Invoice No: RM-2026-014
The date when the invoice is issued must be clearly stated.
Example:
Invoice Date: 10 March 2026
Your invoice must include:
Example:
Supplier: Jane Doe Consulting
Address: 12 Rue de Lyon, 75012 Paris, France
VAT ID: FR123456789
Include your client’s:
Example:
Customer: ABC Software GmbH
Address: Friedrichstraße 45, 10117 Berlin, Germany
VAT ID: DE987654321
The services provided must be described clearly and specifically.
Avoid vague terms like “professional services.”
Example:
Description: Front-end web development services for March 2026
If the service was completed on a different date than the invoice date, this must be mentioned.
Example:
Date of Supply: 31 March 2026
The total amount before VAT must be clearly shown.
Example:
Net Amount: €2,000.00
State the VAT rate charged (e.g., 20%, 21%).
Example:
VAT Rate: 20%
Show the VAT amount separately from the net total.
Example:
VAT Amount: €400.00
The final amount the client must pay.
Example:
Total Payable: €2,400.00
Scenario:
A VAT-registered freelancer in France provides services to a VAT-registered company in Germany. The reverse-charge mechanism applies.
Invoice Notes:
Sample VAT Text:
VAT reverse-charged under Article 44 and Article 196 of the EU VAT Directive
VAT Line:
VAT Rate: 0%
VAT Amount: €0.00
Under the reverse-charge mechanism:
This usually applies when:
Even though VAT is not charged, the invoice must still be VAT-compliant.
Scenario:
A freelancer in Spain provides design services to a private individual in Italy.
Key Points:
Example VAT Line:
VAT Rate: 21%
VAT Amount: €315.00
Any of these can cause payment delays or compliance issues.
Managing VAT correctly becomes more complex when freelancers:
This is where a Merchant of Record service like Remotify becomes valuable.
As a Merchant of Record, Remotify:
For freelancers, this means:
While freelancers can choose to manage VAT themselves, the administrative work increases quickly as client locations expand. Mistakes are costly and time-consuming to fix.
Using a Merchant of Record allows freelancers to operate internationally while staying compliant without building their own payment and tax infrastructure.
A VAT-compliant invoice is not just a formality- it is a legal requirement for freelancers operating in Europe. Understanding what information must be included, when VAT applies, and how to handle cross-border transactions is essential for smooth payments and long-term business stability.
For freelancers who want to scale without managing VAT complexity, working with a Merchant of Record like Remotify can remove compliance stress and allow them to focus on delivering great work.
Disclaimer: This article is for informational purposes only and does not constitute tax or legal advice.
