1. Business Structure

Services to non-UK EU business clients are provided via a UK limited company, acting as an independent
business-to-business (B2B) service provider.

• The contractor is not an employee
• No German payroll, labour leasing, or employment relationship is created
• The UK company is responsible for its own taxes, insurance, and compliance obligations

This is a well-established and widely used model for cross-border IT consulting and engineering services.

2. VAT Treatment (Reverse Charge)

For B2B IT services supplied from the UK to a German VAT-registered business:

• The place of supply is the customer’s country (Germany)
• No UK VAT is charged
• The reverse charge mechanism applies under German VAT law (§13b UStG)

What this means in practice

• Invoices are issued net of VAT
• The German client accounts for VAT in Germany via reverse charge
• The UK provider does not collect or remit German VAT

Invoices include:

• The German client’s VAT ID number
• A clear reverse-charge statement
• No VAT amount or rate
• A UK VAT ID number is not required for reverse-charge B2B services

This is standard compliant EU/UK post-Brexit billing procedure for B2B services.

3. UK VAT Registration

UK VAT registration is not legally required for providing B2B services to German companies under reverse charge.
This is because:

• Services are outside the scope of UK VAT
• UK VAT registration does not change VAT treatment for German clients
• UK VAT registration, while not legally required for this purpose, may be optionally added later if commercially required

Absence of a UK VAT number does not affect compliance or the German client’s VAT position.

4. Customs and EORI

An EORI number is required only for physical goods crossing borders.

In the case of IT contracting:

• No hardware, equipment, or goods are supplied
• Services are delivered digitally and remotely
• No EORI number is required

This engagement concerns professional services only.

5. Permanent Establishment (Betriebsstätte)

Under this engagement, the UK provider does not ordinarily create a German permanent establishment:

• No German office or fixed place of business
• No authority to bind the German company contractually
• No management of German employees
• Services delivered remotely from the UK

Accordingly, no German corporate tax presence arises under this engagement.

6. Independence and Scheinselbständigkeit (false self-employment)

The engagement is structured as independent B2B contracting, not employment.

Key characteristics include:

• Service provision via a foreign incorporated company
• Commercial independence and freedom to serve multiple clients
• Use of own equipment and professional methods
• No integration into German payroll or organisational hierarchy

This structure materially reduces any risk of false self-employment under German law.

7. Data Protection and GDPR

• Services comply with GDPR requirements
• The UK currently benefits from an EU adequacy decision
• Data protection and confidentiality are addressed contractually

Where required, standard data processing and confidentiality clauses are included.

8. What German Clients Do Not Need to Do

German clients do not need to:

• Register the UK provider in Germany
• Operate German payroll or labour leasing
• Withhold tax at source
• Handle customs or EORI procedures

The German client’s obligations in this context are limited to:

• Correct VAT reverse-charge accounting
• Normal contractual and audit documentation

9. Summary

• This is a standard cross-border B2B IT services arrangement
• VAT is handled cleanly via reverse charge
• No German tax, payroll, or employment obligations are triggered under this engagement
• The structure is compliant, auditable, and widely used