VAT Reverse Charge: 🇪🇪 Estonia to 🇳🇱 Netherlands

Yes. When a VAT-registered business in Estonia supplies B2B services to a VAT-registered business in Netherlands, the reverse charge mechanism applies under Article 196 of EU VAT Directive 2006/112/EC. The Estonia supplier invoices at 0% VAT, and the Netherlands customer self-accounts for VAT at their local rate of 21%.

If the customer is VAT-registered, put 0% VAT on the invoice. You must include the customer's Netherlands VAT number and the note: "VAT reverse charge — Article 196, Directive 2006/112/EC". Do not charge Estonia VAT (22%) on cross-border B2B service invoices.

The standard VAT rate in Netherlands is 21%. When reverse charge applies, the Netherlands customer declares 21% VAT in their local VAT return and simultaneously deducts it as input VAT — so the net cash effect is zero for a fully VAT-registered business.

Yes. You must report cross-border B2B services in your EC Sales List (ESL), also known as VIES or Recapitulative Statement. Report these as services (not goods) using the customer's Netherlands VAT number. Filing frequency depends on Estonia's local rules — typically monthly or quarterly.

If the customer in Netherlands does not have a VAT number, reverse charge does not apply. For B2C supplies or non-registered businesses, different rules apply. For most services, you would charge Estonia VAT (22%). For digital/electronically supplied services, Netherlands VAT (21%) may apply via the EU One Stop Shop (OSS) scheme.

Verify the customer's VAT number using the EU VIES system at ec.europa.eu/taxation_customs/vies before issuing a zero-rated invoice. Netherlands VAT numbers start with the prefix "NL". Keep a record of the VIES confirmation for your audit trail.

Reverse charge under Article 196 applies to most B2B services where the place of supply is the customer's country. Some services have special rules — for example, services related to immovable property are taxed where the property is located, and short-term vehicle hire has specific rules. For standard professional, consulting, digital, and software services between Estonia and Netherlands, reverse charge applies.

Your invoice must include: (1) Your Estonia VAT number, (2) The customer's Netherlands VAT number, (3) 0% VAT / VAT amount: 0.00, and (4) The legal reference: "Reverse charge — Article 196, Council Directive 2006/112/EC". Some suppliers also add the Netherlands equivalent note in the local language.