Hi, what is the difference between 0% ECS and 0% RC VAT codes please? we supply services to a VAT registered business in France. I am not sure which one to use, thank you

Hi heni-j, you can check our VAT guide here for further information on each code, we'd recommend reaching out to a tax professional if you're unsure which to use. 🙂

Hi @heni-j 

Neither of these is correct - both are Intra EU codes & we're no longer in the EU...

0.0% RC - Intra EU reverse charge
Used for Intra EU B2B (business to business) transactions on computer chips and mobile phones. (Notice 735 refers).

0.0% ECS - Intra EU B2B supply of services
Used for Intra EU B2B (business to business) sale of services. If the EU customer is not VAT-registered, then the applicable UK rate of VAT is charged.

For services, it is vital to understand the Place of Supply.  See https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec2

For VAT purposes, the place of supply of a service is the place where that service is treated as being supplied. This is the place where it’s liable to VAT (if any).

If the supply is in the UK it is subject to UK VAT. If the supply is in an EU member state or another country it is said to be ‘outside the scope’ of UK VAT.

So if your Place of Supply is deemed to be the UK the service is VATable.  If it's deemed to be overseas, it's outside the scope.

However, the fact that your customer is a VAT registered business in France simplifies things.

See https://www.gov.uk/guidance/vat-place-of-supply-of-services-notice-741a#sec3

The B2B general rule for supplies of services is that the supply is made where the customer belongs.

In your case, France, so you should be using NoVAT code on the invoice (or Exempt if you want the figures to show on your VAT return).

Hope this helps.