VAT Reverse Charge: What Applies to Google Ads, Meta and Software Subscriptions

What Is the VAT Reverse Charge?

In ordinary transactions, the seller charges VAT to the customer and remits it to the tax authority. Under the reverse charge, this role is reversed: the service provider, such as Meta in Ireland, issues an invoice without VAT, and the Greek business receiving the service must calculate, report and—where it has a right to deduct—deduct the corresponding Greek VAT in its own return.

When the Mechanism Applies

The reverse charge applies when all the following conditions are met:

• The transaction is between two businesses (B2B), not with a private consumer
• The provider is established in another European Union Member State
• The provider has a valid intra-Community VAT number
• The service falls under the general place-of-supply rule, meaning it is treated as supplied in the recipient’s country

Advertising services such as Google Ads and Meta Ads, software subscriptions (SaaS), consulting services and many digital services supplied by providers established in the EU usually fall into this category.

The Role of VIES

Before applying the reverse charge, a Greek business must confirm that it has a valid registration in the VIES system (VAT Information Exchange System), so that it has an intra-Community VAT number with the “EL” prefix. Without this registration, the foreign provider may charge VAT from its own country, which cannot be deducted in Greece—a direct financial loss for the business. A standard tax number does not automatically mean VIES registration; this is a separate procedure.

How It Is Reported in Practice

1. The business receives an invoice from the foreign provider without VAT, usually bearing the words “Reverse Charge” or a corresponding reference to Article 14 of the VAT Code
2. It calculates the corresponding Greek VAT, usually 24%, on the invoice value
3. It records the amount in the VAT return both as output tax due and as deductible input tax, where the expense is deductible, usually resulting in no cash impact
4. It classifies the expense in myDATA under the appropriate category, such as other fees for foreign services
5. Where required, it submits a VIES recapitulative statement for the specific service received within the prescribed deadline

See also the changes to VAT for businesses.

An Example: Advertising on Meta Ads

Suppose a Greek IKE spends €2,000 on Facebook and Instagram advertising in one month. Meta, established in Ireland, issues an invoice for €2,000 without VAT, provided that the Greek business entered its intra-Community VAT number when setting up the advertising account.

The Greek business calculates Greek VAT at 24% on €2,000, namely €480, and records it in the VAT return both as output VAT due and as deductible input VAT, provided the advertising expense relates to its taxable activity. In most cases the net result is zero—no additional VAT is paid—but the transaction must be shown correctly in the return, otherwise a discrepancy arises that can easily be identified during an audit.

The Most Common Mistakes

1. Purchasing a service from an EU provider before registering with VIES, resulting in non-deductible foreign VAT being charged
2. Failing to report the corresponding VAT in the return even though the invoice was correctly issued without VAT
3. Incorrectly applying the mechanism to services subject to special place-of-supply rules where the general rule does not apply
4. Late submission of a VIES recapitulative statement, which attracts penalties even when the VAT has been reported correctly
5. Confusing possession of a standard tax number with valid registration in the intra-Community VIES register

Why AADE Focuses on These Transactions

The tax administration is intensifying audits of businesses with a higher risk of discrepancies between myDATA and VIES data, especially when services are received from abroad. Businesses with a clean tax record and consistent returns usually avoid preventive audits, making correct and systematic application of the mechanism even more important.