I believe you're mixing two issues here - Mats' posting refers to the lower cost of EU cross-border payments - nothing to do with VAT.
Does this rule effect invoices from July 1st or on invoices written earlier and paid after the 1st?
AFAIK, the only change affecting VAT effective 01JUL2003 refers to vendors outside the EU.
I have an Austrian client owing me a substantial sum that was due 2 weeks ago. She will unfortunately for me be paying after July the 1st. Theoretically should she be paying VAT?
(Rod, are you reading this? Correct me if I'm wrong...)
You should generally discuss these issues with your tax advisor - any information I provide here does not represent tax advice.
VAT is due at the rate prevailing when the invoice is issued. I assume that you are resident in Germany for tax purposes, and include VAT on invoices issued to German customers. To invoice a translation to an Austrian customer free of VAT, you need that customer's EU VAT ID. If you issue cross-border VAT-exempt invoices to EU customers without that ID, there's a risk that you will be liable for VAT - based on the gross amount you have invoiced.
Hope that clarifies a few things, Ralf