Cross-border B2B sales change the invoice, not just the tax total. An intra-EU supply to a VAT-registered business is zero-rated and needs the buyer's validated VAT ID plus a specific note; an export outside the EU is exempt on different grounds and needs proof of export. Get the category wrong and the invoice is wrong — and with a structured e-invoice, a validator will say so. This guide covers which case applies, what each invoice must say, and how EN 16931 encodes it.
Three cases that look similar and are not
A German shop selling abroad hits three distinct treatments, and they are decided by what you sell, to whom, and where it goes — in that order.
- Intra-community supply of goods (innergemeinschaftliche Lieferung) — goods physically leaving Germany for another EU member state, buyer is a business with a valid VAT ID from another member state. Zero-rated under §4 Nr. 1b in conjunction with §6a UStG. The buyer accounts for the tax as an intra-community acquisition.
- Reverse charge on services — B2B services where the place of supply moves to the customer's country under §3a Abs. 2 UStG. You invoice without VAT and the customer accounts for it. This is the case most digital and service sellers are in.
- Export (Ausfuhrlieferung) — goods leaving the EU customs territory entirely. Exempt under §4 Nr. 1a with §6 UStG, and it does not matter whether the buyer is a business or a consumer.
Consumer sales inside the EU are none of these: they are taxed, generally in the customer's country under the OSS rules once you pass the EUR 10,000 distance-selling threshold. "Foreign customer" is not by itself a reason to leave VAT off an invoice, and this is the most common error in the whole area.
The buyer's VAT ID is a condition, not a formality
For an intra-community supply, the zero rate depends on the buyer having a valid VAT identification number issued by another member state, and on you recording it. Since the 2020 quick fixes, a valid VAT ID and a correct EC Sales List entry are substantive conditions of the exemption, not administrative details you can produce later.
Practically, that means validating the number against VIES at the time of sale, not at the end of the quarter — and keeping evidence of that check. VIES answers "valid" or "not valid" for a number, and confirmation IDs from the query are the audit trail you want when a tax auditor asks why you zero-rated a supply. A number that was valid last year is not evidence about today.
You also need proof the goods actually left Germany — the Gelangensbestätigung or an equivalent set of documents. Zero rating rests on the goods moving; a valid VAT ID alone does not carry it.
What the invoice must say
Each case has required content beyond the normal §14 Abs. 4 particulars:
- Intra-community supply: your VAT ID, the buyer's VAT ID, and an explicit note that the supply is exempt — for example "Steuerfreie innergemeinschaftliche Lieferung" / "Exempt intra-community supply".
- Reverse charge: both VAT IDs and a note placing the liability on the recipient — "Steuerschuldnerschaft des Leistungsempfängers" / "Reverse charge — VAT to be accounted for by the recipient".
- Export: no buyer VAT ID is required, but a note that it is an exempt export — "Steuerfreie Ausfuhrlieferung" / "Exempt export supply" — plus the export documentation in your records.
The note is not boilerplate. §14 Abs. 4 Nr. 8 UStG requires a reference to the exemption, and its absence is a formal defect in the invoice — which matters most to your customer, whose input-tax position depends on holding a properly issued document.
How EN 16931 encodes it
In a structured e-invoice, the treatment is a code, not a sentence. Each line carries a VAT category code (BT-151) from UNTDID 5305, and the document carries a matching breakdown:
- S — standard rate. The normal domestic case.
- AE — VAT reverse charge.
- K — intra-community supply of goods.
- G — export outside the EU.
- E — exempt from tax, for domestic exemptions.
- Z — zero rated. Not a synonym for the above; using it for an intra-EU supply is wrong.
Where a category is not S, EN 16931 requires an exemption reason (BT-120 or BT-121) in the tax breakdown — the structured equivalent of the note on the printed page. The KoSIT validator enforces this: a category AE or K line with no exemption reason, or a K supply with no buyer VAT ID, fails validation. That is a feature. The rule set encodes the same requirements §14 does, and catches the mistake before your customer's system does.
Rechna picks the category from the order rather than asking you to. A buyer VAT ID present, the order shipping to another EU member state, and no tax charged resolves to reverse charge or intra-community; a destination outside the EU resolves to export. When the signals contradict each other — tax-exempt but no buyer VAT ID, for instance — it refuses to issue and says which piece is missing, because there is no safe guess to make about someone else's tax position.
Setting Shopify up so the data is there
The invoice can only be as good as the order. Three things to get right in the store:
- Collect the VAT ID in a place the order carries — Shopify's B2B company profiles hold a tax registration, which is more reliable than a note field someone types into at checkout. If you are running wholesale properly, this is also where verification belongs.
- Match the tax setting to the treatment. If a B2B EU customer is tax-exempt in Shopify but the order still has tax lines, the order and the intended treatment disagree — and no correct invoice exists for that state.
- Keep the shipping destination accurate. Category K versus G is decided by where the goods go, not by the billing address.
The short version
Decide the case before the tax: intra-community supply for goods to an EU business with a validated VAT ID, reverse charge for B2B services, export for goods leaving the EU, and ordinary VAT for consumers. Record and validate the buyer's VAT ID at the time of sale, keep proof the goods moved, and put the exemption note on the invoice. In a structured e-invoice these become category codes S / AE / K / G / E and a mandatory exemption reason — and the official validator will reject a document that claims an exemption without the evidence fields to support it.
Plain-language summary, not tax advice. Cross-border VAT has real edge cases — chain transactions, consignment stock, digital services — and those belong with your Steuerberater.