A tax calculation for an EU business customer shows local VAT (forward charge) when you expected the VAT to be zeroed under reverse charge.

What you will see

The calculation result applies the destination country's VAT to a transaction where your buyer is a VAT-registered business in another EU country.

Why this happens

1. The buyer's VAT ID is missing, or is not valid for the ship-to country

2. The supply is domestic: the ship-from address is in the same country as the ship-to address

3. You are established in the ship-to country, so the supply is treated as locally made even though your buyer has a valid VAT ID

4. The transaction has no ship-from or bill-from address, and the fallback used a physical presence record that places the supply origin in the destination country on the transaction date

How to fix it

If the buyer's VAT ID is missing or invalid:

1. Add or correct the buyer's VAT ID for the ship-to member state

2. Verify the ID through your usual process, for example VIES. Kintsugi does not validate VAT numbers for you

3. Recalculate the transaction

If the supply is domestic:

Forward charge is the correct treatment. A supply that starts and ends in the same country keeps local VAT, even with a valid buyer VAT ID. No fix is needed.

If you are established in the ship-to country:

1. Review your physical presence records for that country

2. If an establishment record is wrong, or its start and end dates are wrong, correct it

3. If the record is accurate, forward charge is the correct treatment. Local VAT applies

If the fallback used the wrong supply origin:

1. Add the ship-from or bill-from address to the transaction when you have it

2. If the address is genuinely unavailable, check the start and end dates on your physical presence records. The fallback uses the presence that was active on the transaction date, which matters for older transactions

3. Recalculate the transaction

How to confirm it is resolved

Rerun the calculation. A qualifying cross-border transaction shows zero VAT on your side under reverse charge. If the transaction is domestic or you are established in the destination, forward charge with local VAT is the expected result.

If this did not work

Reach out via the chat bubble in the bottom right. To help us resolve this quickly, please include:

• The email address on your Kintsugi account

• The transaction ID

• The buyer's VAT ID

• The ship-to address, and the ship-from or bill-from address if the transaction has one

• Your physical presence records for the countries involved, including start and end dates

• Roughly when you first noticed the issue