If you are a VAT-registered EU supplier who moves, transfers, supplies, or sells goods and certain services to VAT-registered businesses in other EU countries, you must provide details of these sales using an EU Sales List (ESL) report. You must then submit the ESL report to your country’s tax authority showing VAT charge details for each of your EU customers, and the value of the supplies you made to them in the period covered by the report.

The information provided on the ESL report is used by the tax authorities in other EU countries to check that the businesses you supplied goods or services to are correctly accounting for and reporting VAT. The details are also used to gather statistics on how goods are traded in the EU.

From 1 January 2010, most services provided to business customers are treated as supplied in the country where the business customer is registered, rather than the supplier’s country of registration, as was previously the case. In addition, ESL reporting became mandatory for businesses that provide services subject to reverse-charge arrangements in the customer’s EU member state. The introduction of the reverse charges means that VAT on services is zero rated for the supplier, but must be paid by the customer.

Two GTM reports, the IC Declaration by Business Relation report and the IC Declaration Transactions report, collate intra-EU transaction information that you can use to complete ESL report forms for your country’s tax authority. These two reports determine intra-EU transactions using the country codes of the ship-from and ship-to addresses.

To correctly track the reversed charges as a supplier, it is recommended that you create new tax rates for invoices for services subject to reverse charges. See Supplier Setup for Reverse-Charged VAT. As a customer, you must ensure that the tax rate you use to track the reverse-charged VAT is marked as AP Tax Retained. See Customer Setup for Reverse-Charged VAT.