Tax basics

What does reverse charge mean?

The customer accounts for VAT when the legal conditions are met.

Under reverse charge the supplier generally invoices without supplier-accounted local VAT and the customer reports the tax under its local rules. It does not apply automatically to every foreign invoice.

Conditions

Check the supply type, B2B status, place of supply, registrations and special rules. The invoice normally needs an appropriate note and correct tax coding.

Common error

An invalid VAT ID, a supply to a fixed establishment or a special service can change the default outcome.