As soon as you provide a service across the border as a self-employed person, VAT gets more interesting. Especially with customers in so-called third countries - i.e. outside the EU - the VAT logic works differently than within the EU. Reverse charge, One-Stop-Shop, and Zusammenfassende Meldung (recapitulative statement) play no role here, or only a modified one.
This article gives you the big picture. For the individual constellations (B2B, B2C, digital products, registration abroad), you'll find the relevant deep-dive articles at the end of each section.
Note: This article is intended for general orientation. Each individual case should be examined separately - especially where a possible registration obligation abroad is concerned.
Third countries are all countries that do not belong to the European Union - for example, Switzerland, the United Kingdom (since Brexit), Norway, the USA, Canada, or the United Arab Emirates. Some EU territories are also treated as third-country territories for VAT purposes, such as the Canary Islands, the Channel Islands, or Helgoland.
The EU / third country distinction matters because different rules apply to third-country transactions regarding place of supply, documentation requirements, and invoicing logic.
VAT always depends on where a service is deemed to have been provided: the so-called place of supply. Only if the place of supply is in Germany does German VAT apply.
The VAT Act (UStG) distinguishes between
B2B (service to a business): The place of supply is generally where the receiving business is located (§3a Abs. 2 UStG).
B2C (service to a private individual): The place of supply is generally where you as the providing business are located (§3a Abs. 1 UStG).
These general rules are supplemented by numerous exceptions - and that's exactly where the complexity lies.
If you provide a service to a business in a third country, it is generally not taxable in Germany. You issue your invoice without German VAT and add a note indicating that the place of supply is abroad. Your customer handles the service according to the local law of their country.
Important: You must be able to prove that your customer is indeed a business. Unlike with EU customers, there is no uniform VAT ID for this - instead, you work with local documentation (company register extracts, certificates).
For certain services, the general rule does not apply - for example for real estate services, event services, or restaurant and transport services. You'll find details in the deep-dive article: → B2B invoices to third countries: how to invoice correctly.
For private customers in third countries, the general rule is taxation in Germany. So you generally issue an invoice with 19% German VAT.
The important exception is the so-called catalogue services (§3a Abs. 4 UStG).
These include, for example, advertising services, consulting, rights licensing, data processing, staff secondment, or electronic services.
In these cases, the place of supply shifts to your customer's place of residence - and therefore potentially abroad. German VAT then no longer applies, and you need to check whether you are required to register in the relevant country.
The full catalogue, examples, and the distinction from "standard" B2C services can be found here: → B2C transactions in third countries and catalogue services
If you sell digital products to private customers - such as e-books, online courses, apps, or SaaS subscriptions - the customer's place of residence always applies as the place of supply (§3a Abs. 5 UStG). Within the EU, this is handled by the One-Stop-Shop (OSS). Outside the EU, the OSS does not apply, and you need to check country by country whether a registration obligation exists.
This case is particularly relevant for many self-employed individuals and has its own pitfalls: → Selling digital products to third countries: what you need to know
If the place of supply shifts to a third country, this does not automatically mean you are required to register there - but it can. Thresholds and regulations vary widely: Switzerland has a worldwide turnover threshold of CHF 100,000, the UK has specific rules for digital services, and the USA operates with sales tax and nexus rules. If you regularly serve customers in a particular country, you should clarify this early on.
An overview of the most important countries and their registration rules can be found here: → VAT registration abroad: when do you need to register?.
Before issuing an invoice to a third country:
Is my customer a business or a private individual? (B2B vs. B2C)
What type of service is it? (standard service, catalogue service, digital service, special case such as real estate/events)
Where is the place of supply accordingly - and what does that mean for my invoice?
Transactions with third-country customers aren't complicated once you've understood the basic principle: it always comes down to the place of supply. In B2B, it usually shifts abroad without much fuss; in B2C, it often remains in Germany - except for catalogue and digital services, where things can quickly become international.
If you work with customers abroad, it's worth exploring the constellations most relevant to you. The linked deep-dive articles go into each topic in more detail - with examples, concrete recommendations, and the most important pitfalls to watch out for.
If you have questions on these topics, feel free to reach out to our Tax Coaches at any time.
Author - Valesca Wilms
As content marketing lead at Accountable Belgium, Valesca writes about freelancing, self-employment, and taxes based on her own experience as a freelancer.
Who is Valesca ?Thank you for your feedback!
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