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# Should I Add VAT to My Invoices?

The rule is quite simple and depends on the type of service your company offers and whether it is subject to VAT or not.

| First of all, **if your company is NOT subject to VAT**, that is, it does not have a VAT number, you will **NEVER add VAT to your invoices**.

Then, what if your company is subject to VAT (VAT liable)? Let's see.

| **If your services require your direct intervention** (eg. software development, consulting, marketing, etc.), the following rules apply:

* If your **customer is a B2B (a company) in Europe, with a VAT number**, you will not have to add VAT to the invoice (0%). Instead, you add a clause to your invoice like this: “The purchase is liable to Intra-Community supply 0%, Reverse charge”.

* If **your customer is B2C (individual), or B2B without a VAT number**, you add VAT to the invoice.

* Finally, if **your customer is outside of Europe** (eg. the United States), you do not add VAT (0%).

| On the contrary, **if your services do NOT require your intervention**, that is, they are automated (for example, you have created a web application or a downloadable eBook), then **you need to get a VAT number and then apply to the OSS scheme as soon as your sales exceed 10,000 euros a year, but we recommend you to do it even before you start selling your products or services**.

Then, these rules apply:

* If **your customer is a European B2B (a company) with a valid VAT number**, you do not add VAT (0%) and write the same clause.

* On the contrary, if **your customer is B2B or B2C and does not have a VAT number, but is from Europe** you add the VAT of the customer's home country. For instance, for a Spanish customer, this would be 21%.

* Finally, if **your customer is outside of Europe**, you do not add VAT (0%).

In the table below, we provide a concise summary of this information:

| Do you have a VAT No.? | Customer Location | Customer Type | Is your involvement needed to distribute the service/product? | VAT Application |
| ---- |
| No | Any | Any | Indifferent | N/A (Not Applicable) |
| Yes | Estonia | Any | Indifferent | 24% |
| Yes | EU Country | B2B with VAT No. | Indifferent | 0% (Reverse Charge) |
| Yes | EU Country | B2B or B2C without VAT No. | Yes | 24% |
| Yes | EU Country | B2B or B2C without VAT No. | No | VAT of customer's |
| Yes | Outside EU | Any | Indifferent | N/A (Not Applicable) |



🇪🇪 **Important exception for Estonia**: Remember that your company needs to add Estonian VAT (24%) to any invoice you make to another Estonian company (since it is an internal operation within the Estonian tax system).

${youtube}[VAT in Estonia: When and How Should You Apply It?](iIV4wQWZYYY)

You have more information about how Estonian VAT and taxes work [here](https://companio.co/blog/tips/taxes-vat-for-estonian-companies/).