VAT on Affiliate Commissions in the EU: Reverse Charge and B2B Obligations

VAT on affiliate commissions is a topic most affiliate marketing guides skip entirely. Yet the moment a European SaaS publisher pays commissions to affiliates established in other EU member states — or outside the EU — specific VAT rules apply. Getting this wrong creates tax reassessments, penalties, and invoices rejected by your partners' finance teams.

This article explains the VAT framework for a B2B SaaS company paying affiliate commissions to partners across the EU and beyond.

An affiliate commission is a supply of services

Before addressing VAT mechanics, the nature of an affiliate commission must be established. The affiliate provides a service to the publisher: it generates traffic, leads, or customers in exchange for variable compensation. This qualifies as a supply of services under the EU VAT Directive (Directive 2006/112/EC).

This classification matters because the place-of-supply rules for B2B services are different from those for goods, and different again from B2C rules.

The general B2B rule: where the customer is established

For services supplied between taxable persons (B2B transactions), the general rule under Article 44 of the EU VAT Directive is that the service is taxable in the member state where the recipient (the buyer of the service) is established.

In practice, when a SaaS publisher established in one EU member state pays a commission to an affiliate established in a different EU member state:

• The place of supply is the publisher's member state (the recipient of the service).
• VAT is due in that member state.
• But it is not the foreign affiliate who accounts for it: it is the publisher itself, through the reverse charge mechanism.

The reverse charge mechanism

The reverse charge is a mechanism by which the recipient of a cross-border B2B service self-accounts for VAT at the rate applicable in their own member state, then claims that same amount as input VAT deduction on the same return. The net position is zero for fully taxable businesses, but the VAT must still flow through the accounting records.

For the publisher (the service recipient)

A publisher receiving an invoice from an affiliate established in another EU member state must:

1. Self-account for VAT at the applicable domestic rate on the commission amount (rates vary by member state — verify the current rate with your national tax authority or on the EU's official VAT rates page).
2. Report the reverse-charged VAT as output VAT on their VAT return.
3. Simultaneously claim it as input VAT deduction (for fully taxable businesses, the net effect is nil).
4. Retain the affiliate's invoice as a supporting document.

For the affiliate (the service provider)

The affiliate established in another EU member state does not charge VAT on their invoice. They issue a net-of-VAT invoice and must include the mandatory reference:

"Reverse charge" (or the equivalent in their local language: "Autoliquidation" in French, "Steuerschuldnerschaft des Leistungsempfängers" in German, etc.)

This reference signals that the recipient (the publisher) is liable for the VAT, in accordance with Article 196 of VAT Directive 2006/112/EC.

VIES VAT number validation

Before processing an invoice under the reverse charge mechanism, the publisher must verify that the affiliate is actually registered for VAT in their member state. The official tool for this is the VIES system (VAT Information Exchange System), available at ec.europa.eu/taxation_customs/vies.

A VIES check confirms that the VAT identification number provided by the affiliate is valid and active. Keep a timestamped record of each check (a screenshot or an automated API log) in your affiliate programme documentation.

What if the VIES check returns no result?

If the number is not found or the affiliate has no VAT number, several situations are possible:

• The affiliate may be below the VAT registration threshold in their member state.
• They may benefit from a small business VAT exemption scheme.
• Their number may not yet have propagated to the VIES database (there can be a delay of several days after registration).

In the absence of a valid VAT number, revert to your tax adviser to determine the correct treatment for that specific affiliate.

VAT-exempt affiliates: the small business exemption

Many affiliates — particularly content creators, sole traders, and micro-entrepreneurs — operate below the VAT registration threshold in their member state and are therefore not registered for VAT. EU member states each set their own thresholds for this exemption (verify current thresholds via your tax authority or the affiliate's national tax administration).

When an affiliate is VAT-exempt:

• They do not charge VAT on their invoice.
• They should indicate on their invoice that they benefit from a VAT exemption under the relevant national provision (for example, in France: "TVA non applicable, article 293 B du CGI").
• The publisher does not apply reverse charge, since there is no underlying taxable transaction by a registered person.

Affiliates established outside the EU

When the affiliate is established outside the EU (United States, United Kingdom post-Brexit, Canada, etc.) and provides services to a VAT-registered publisher within the EU, the Article 44 rule still applies: the place of supply is the publisher's member state.

• The publisher self-accounts for VAT under the reverse charge mechanism.
• The affiliate issues a net-of-VAT invoice, typically referencing "services taxable in the country of the recipient".
• No VAT is charged by the affiliate.

Regarding the United Kingdom: since 1 January 2021, UK VAT rules operate independently from EU rules. The reverse charge still applies symmetrically for B2B services received from UK-established suppliers, but the UK is no longer part of VIES. Verify the affiliate's UK VAT number separately via HMRC's VAT number checker.

Invoice requirements for EU-to-EU cross-border commissions

To allow the publisher to process the reverse charge correctly, the invoice issued by an EU-based, VAT-registered affiliate must include:

For a ready-to-use affiliate invoice template covering these requirements, see our affiliate invoice template.

Summary by affiliate situation

Practical steps for your affiliate programme

Managing VAT compliance across a multi-country affiliate roster becomes operationally complex without a clear process. A few practical measures:

• Collect VAT status at onboarding: request each affiliate's VAT number or written confirmation of VAT-exempt status.
• Run a VIES check before the first payment and periodically thereafter.
• State invoicing requirements in your programme terms: affiliates frequently do not know what "reverse charge" means without being prompted.
• Document everything: VIES checks, declarations, invoice copies. In a VAT audit, the burden of proof rests with the publisher.

For guidance on structuring payments to affiliates, our article on how to pay affiliates in SaaS covers payment flows and practical constraints. You can also estimate net commission amounts with our affiliate commission VAT SEPA calculator.

For a broader view of compliance obligations in an affiliate programme, see our article on affiliate programme compliance: FTC and GDPR. If you work with sole trader affiliates specifically, our guide on paying sole trader affiliates in the EU covers the practical edge cases.

How RefCampaign handles this

RefCampaign is a Stripe-native affiliate platform hosted in Europe. It collects affiliates' tax information at onboarding — VAT number, exemption status, country of establishment — and integrates this data into SEPA payment flows. Payments to affiliates are processed directly through Stripe, with the structured data needed to produce accurate payment records. The platform does not replace a tax adviser, but it centralises the information that makes VAT compliance reliable at scale.