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Book a call ↗An invoice is the document a contractor issues to bill a client for work done. In the EU it is also a tax document: the VAT Directive sets out what it must contain, from a sequential number to the supplier's VAT number.
When a US company works with an independent contractor in Europe, the monthly invoice takes the place of a payslip. It is what you pay against, what your accountant books, and part of the evidence that the relationship is a business-to-business one.
What an EU invoice must show (Article 226)
The VAT Directive lists the mandatory details (Article 226):
| Element | Detail |
|---|---|
| Date and number | Date of issue and a sequential number that uniquely identifies the invoice |
| VAT numbers | The supplier's VAT number; the customer's too where the customer is liable for the VAT |
| Names and addresses | Full name and address of supplier and customer |
| The supply | Extent and nature of the services, and the date they were supplied or completed |
| Amounts | Taxable amount, unit price excluding VAT, VAT rate and VAT amount |
| Special mentions | For example "Reverse charge" where the customer accounts for the VAT, or a reference to the exemption that applies |
The EU's business portal adds that the VAT identification number must appear on every invoice to customers (Your Europe).
Who the client is changes the invoice
- US business client. Services to customers outside the EU usually carry no VAT (Your Europe). Wording for out-of-scope supplies is set nationally, so the contractor's accountant decides the exact note.
- Business client in another EU country. No VAT is charged; the customer pays it under the reverse charge, and the invoice says "Reverse charge".
- Client in the contractor's own country. Local VAT is charged at the local rate.
What a US company should check before paying
- Your company's legal name and address are correct.
- The invoice number follows on from the last one.
- The period and the work match the contractor agreement.
- No VAT is added for a US client unless the contractor's accountant has a specific reason.
- The payee matches the name on the contractor's W-8BEN.
Keep invoices with the contract and the W-8BEN. Together they are the paper trail your accountant and any later status review will look at first.
See W-8BEN, contractor agreement and how to legally pay a remote European hire. To model the full cost of a contractor against a US employee, use the US vs Europe salary calculator.
This is general information, not legal or tax advice. Rules differ by country and change, so confirm your case with a local lawyer or accountant.
Euro Remote Talent runs searches across Europe for a flat $6,500, with a shortlist of three vetted candidates in 21 days and a 12-month replacement guarantee, through Hiring Done For You. If you would rather run the search yourself, a job post is $299, live for 60 days, and the fee is credited in full if you later move to the done-for-you service.
