B2B and B2C

What it means

B2B means trade between businesses, B2C selling to end consumers. The distinction looks like a marketing label, but in fact it shapes contracts, prices, invoicing and tax. The same company often does both, for example a wholesaler with an online shop for the public.

In B2B there are fewer customers placing larger orders, several people take the decision and deals take longer. Prices are usually quoted net of VAT, payment is on invoice with credit terms, and contracts are negotiated. In B2C an individual buys quickly, the final price including tax is shown and payment is immediate.

Legally the main difference is the protection of the weaker party. A sale to a consumer is a consumer contract, subject to strict rules on information, complaints and withdrawal. Between businesses the Commercial Code applies, and freedom of contract is much wider.

How it works in practice

For VAT the difference shows mainly in services and sales abroad. The place of supply of a service to a business in another EU country is usually where the customer is, and the customer self-assesses the tax, whereas for a consumer it often stays in Slovakia or goes through OSS. That is why, when invoicing, we check that the customer really is a business with a valid VAT number.

B2C sales for cash or by card must be recorded in the e-kasa system, while a B2B invoice paid into a bank account need not be. Companies with both kinds of customer therefore need two ways of documenting sales and clear rules on when each applies.

Terms and conditions are written separately for businesses and consumers. A clause that is normal in B2B, such as a limitation of liability or a short complaint period, is void against a consumer and can lead to a fine at an inspection.

What to watch out for

A risky case is a private person posing as a business, for example quoting a trade licence number for a private purchase. If the seller applies the business-to-business treatment, it may have to pay the VAT it should have charged when audited. When in doubt, check the identification details and the purpose of the purchase.

The second mistake is pricing that ignores tax. If a company carries a B2B price list over to B2C with the same figures while it must show consumers VAT-inclusive prices, it loses the whole tax out of its margin. Consumer prices have to be worked out from the final amount.