Invoicing Foreign Clients

There are two parts to invoicing foreign clients.  The first is the invoice itself.  The second, if you are VAT registered is the treatment of VAT on the invoice. 

The invoice

You can invoice foreign clients in the language of the country they are based in and in their currency as long as it is freely convertible, but you have to put the converted amount in euros on the invoice.  I always invoice UK clients in sterling and use the Bank of France day rate for conversion.  I've signed up to vosfactures.fr (Disclosure: this is a link which will allow me to earn a little free invoicing, so if you don't want me to you can always just type the website address in your browser) to generate invoices.  They automatically calculate the euro amount using the up-to-date exchange rate. 

It's a good idea to do the invoice in dual languages (in my case English and French) as otherwise you may need to get a court-appointed translator to translate them if you are audited by the taxman, but vosfactures do that for me too.  By the way I use the cash accounting method, so I don't use the euro amount that is on the invoice in my books, but the Bank of France month end average for the month that I get paid.

VAT

Unfortunately invoicing foreign clients for VAT is not that straightforward.  There are different rules depending on whether the client is based inside the EU or not and whether they are registered for VAT themselves.

EU companies with a VAT number

Firstly you need to get hold of the company's VAT number.  The easiest way to do this is to ask.  Then look it up on the EU portal to make sure that it is valid.  Invoices can then be prepared with a zero rate of TVA, but they must bear the words "Opération bénéficiant du régime des livraisons intracommunautaires (autoliquidation) - article 138 de la directive 2006/112/CE" and the client's VAT number.

EU companies without a VAT number

If you are selling a "dematerialised service" you have to charge VAT at the rate that is applicable in the client's country.  For client's based in the UK you will have to charge 20%.  On the invoice you will need to state that you have invoiced at the UK rate in accordance with EU regulations.

You may also be able to declare them through the MOSS portal on your company's account on the Impots website.  You have to register for this separately from the main VAT declaration and you need to complete a quarterly return, by the 20th of the month following the end of the quarter whether or not you have had any sales that quarter.  More details available in French on the Impots site. Please note that MOSS is only available if you are selling electronic goods or services with little human input at the time of sale eg software that has already been built and is not customised, e-books or music downloads etc.

If you are unable to use MOSS you have to register for VAT in the country of the client and declare and pay the VAT there.

Non-EU companies

This is the most straightforward of them all as you don't have to invoice for VAT.  Add the wording "Exonération de TVA, article 44 directive 2006/112" to your invoice to make clear why you aren't charging it.

At the moment the UK comes under the EU rules.  Depending on what happens with Brexit, those rules will remain in place for the transition period, but if there is no agreement, the UK will be treated as a non-EU company from whenever the UK leaves.