The short answer
If you work for a business outside the EU, say in Switzerland, the US or the UK, your service is usually not taxable in Germany. You invoice without German VAT, add a note saying so and report the sale in your VAT return. Private customers outside the EU are different: for them, German VAT often still applies.
This guide is about customers outside the EU. Businesses in other EU countries come with their own duties around VAT IDs and the EC sales list, which the guide to reverse charge explains.
Services to businesses outside the EU
Services to businesses follow the basic rule of § 3a (2) UStG: the place of supply is where your customer runs their business. If they are in Basel, Austin or Manchester, that is where the place of supply is. The service is then not taxable in Germany, so no German VAT is due.
This covers the typical work of freelancers: design, development, writing, consulting, photography with usage rights, translation. The law makes exceptions mainly for services connected with real estate and for certain events. If you work on site in Germany, at a trade fair for instance, check more closely.
How you know your customer is a business
Inside the EU, the VAT ID shows that you are supplying a business. Outside the EU there is no common number for that. The tax authorities still expect you to be able to show that your customer is a business, and under section 3a.2 (11) UStAE they accept a certificate from an authority in the customer’s country.
In practice, what you receive anyway helps: the company name in the contract, the customer’s registration or tax number, such as the Swiss UID or the UK VAT registration number, and the company’s website. Keep these with the job. Without any proof, the tax office may treat the service as one to a private customer.
Private customers outside the EU
Private customers follow a different basic rule. The place of supply is where you run your business (§ 3a (1) UStG). A private person in Zurich therefore generally gets an invoice with German VAT.
There is an important exception. For the catalog services of § 3a (4) UStG, the place of supply is where your customer lives if they live outside the EU. The catalog includes, among others:
- granting and transferring copyrights and similar rights
- advertising and public relations services
- consulting, including the work of engineers, interpreters and translators
- data processing and providing information
- services supplied electronically
If your service is one of them, it is not taxable in Germany even for a private customer outside the EU. For catalog services you do not need to prove that the customer is a business, but you do need to show that they live outside the EU. Whether your particular service is on the list is a question for your tax advisor if in doubt.
What goes on the invoice
Write the invoice as completely as a domestic one, with everything from the invoice requirements: names and addresses, your tax number or VAT ID, invoice number, date, the service and the service period. Add:
- no German VAT. The invoice shows only the net amount.
- a note on why no tax is charged, for example “Nicht im Inland steuerbare Leistung” with an English line such as “Not taxable in Germany, place of supply outside the EU.”
- your customer’s number, if they have one. German law does not require it here, but it helps as proof.
You need the note “Steuerschuldnerschaft des Leistungsempfängers” under § 14a UStG for customers in the EU. German law does not require it for customers outside the EU. Whether tax is due in your customer’s country, who owes it and what they expect on the invoice depends on that country’s law. Switzerland, the UK and many US states have their own rules. If in doubt, ask your customer what their bookkeeping needs.
A word on the amount: many customers outside the EU want to pay in francs, dollars or pounds. What that means for VAT and the EÜR is in the guide to invoices in foreign currency.
Reporting: VAT return yes, EC sales list no
A sale that is not taxable in Germany still goes into your VAT return. Services whose place of supply is outside the EU go in field 45, “other non-taxable sales (place of supply not in Germany)”. The tax on them is zero, but the figure shows the tax office where your revenue comes from. More in the guide to the VAT return.
You file no EC sales list for customers outside the EU. The EC sales list under § 18a UStG covers only sales to businesses in other EU countries.
Goods are a different case
If you sell goods outside the EU, such as printed books or artworks, other rules apply. An export delivery is taxable in Germany but exempt under § 4 No. 1 (a) together with § 6 UStG, provided you can prove the export. That takes export documents, usually from the customs electronic export procedure. This is rare for freelancers, and it is worth going through the documentation duties with your tax advisor beforehand.
This guide explains the rules in general and is not tax advice.
Common questions
Do I need a VAT ID for customers in Switzerland?
No, your VAT ID is not required on an invoice to a customer outside the EU; your tax number is enough. Many customers still ask for your VAT ID. If you have a VAT ID, put it on the invoice, which makes the check easier for your customer.
Do I have to write the invoice in English?
German law does not prescribe a language. For your customer an English invoice is often easier. Make sure the mandatory details stay complete and the note on the missing VAT is clear.
Does this apply under the small business rule too?
Under the small business rule you charge no VAT anyway, including to customers outside the EU. Whether the invoice then carries the § 19 UStG note or the note on the place of supply is worth settling once with your tax advisor. Which sales count toward the threshold is in the guide to the small business rule.
What about a UK customer since Brexit?
The UK has not been part of the EU since 2021 and counts as a third country. Businesses there are treated like those in Switzerland or the US. Northern Ireland has special rules for goods, not for services.