VAT & Tax

Gilbert handles EU VAT automatically, ensuring your invoices are tax-compliant across all 27 member states. This guide explains how VAT works in Gilbert and what you need to know.

How EU VAT Works

Value Added Tax (VAT) is a consumption tax applied to goods and services in the European Union. The rules depend on:

• Where your business is located
• Where your customer is located
• Whether your customer is a business (B2B) or consumer (B2C)

Automatic VAT Calculation

Gilbert automatically determines the correct VAT treatment:

1. Checks your business location
2. Checks the customer's location
3. Validates B2B status (if VAT number provided)
4. Applies the correct VAT rate

B2C Transactions

For consumers (no VAT number):

B2B Transactions

For businesses (valid VAT number):

VAT Number Validation (VIES)

For B2B transactions, Gilbert validates VAT numbers using the EU VIES database.

How Validation Works

1. Customer has a VAT ID registered in their account
2. Gilbert queries VIES in real-time
3. Result determines tax treatment:
   • Valid: B2B treatment (reverse charge eligible)
   • Invalid: B2C treatment (VAT charged)

Reverse Charge

When reverse charge applies:

• You charge 0% VAT
• Invoice states "Reverse charge"
• Customer accounts for VAT themselves
• Required for B2B cross-border EU sales

Invoice Display

Configuring Your Business

Setting Your Location

1. Navigate to Settings
2. Enter your business address
3. Add your VAT number
4. Save

Your location determines:

• Which VAT rules apply
• Your reporting obligations
• Invoice requirements

VAT Number Display

Your VAT number appears on all invoices, as required by EU law.

Customer VAT Setup

Adding Customer VAT Numbers

1. Open the customer record
2. Enter the VAT number in the tax section
3. Gilbert validates automatically
4. Status shows as Valid, Invalid, Not Validated, or Unknown

When Customers Don't Have VAT Numbers

If a business customer doesn't have or won't provide a VAT number:

• Treat them as B2C
• Charge the appropriate VAT rate
• Invoice is still compliant

Invoice Requirements

Gilbert invoices include all EU-required information:

Always Included

• Sequential invoice number
• Issue date
• Your business name and address
• Your VAT number
• Customer name and address
• Line items with quantities and prices
• VAT amounts (or reverse charge notice)
• Total amount

For Reverse Charge

• Customer's VAT number
• "Reverse charge" notation
• Reference to EU directive

Common Scenarios

Selling to a German Business

Your business: Netherlands Customer: Germany with valid VAT number

Selling to a French Consumer

Your business: Netherlands Customer: France (no VAT number)

French VAT rate (20%) is applied because the customer is a consumer located in France.

Selling to a Dutch Business

Your business: Netherlands Customer: Netherlands with valid VAT number

Dutch VAT rate (21%) is applied because both parties are in the same country—reverse charge does not apply to domestic transactions.

Frequently Asked Questions

Related

• Customers — Setting up customer VAT details
• Invoices — How VAT appears on invoices
• Getting Started — Initial setup including VAT