Tax Settings for Clients

dVersum supports various tax scenarios depending on the client type and location. These settings are automatically applied during invoice creation.

Basics

German Clients

For clients in Germany:

EU Clients (Business)

For business clients in other EU countries:

Non-EU Clients

For clients outside the EU:

Reverse Charge Procedure

What Is Reverse Charge?

Under the reverse charge procedure, the VAT liability shifts from the service provider to the recipient (your client). You issue a net invoice.

Requirements

1. Business client - Your client must be a company
2. EU country - Client is located in another EU country
3. Valid VAT ID - The client must have a valid VAT identification number
4. B2B service - The service must be for the company

Setting Up for a Client

1. Open the client
2. Go to Tax Settings
3. Enable Apply reverse charge
4. Enter the VAT ID
5. dVersum validates the number automatically

Automatic VAT ID Validation

dVersum validates EU VAT identification numbers:

1. The number is checked upon entry
2. Valid numbers are marked with a checkmark
3. Invalid numbers show a warning

Validation includes:

• Format check (country code + number)
• VIES database query (EU database)
• Company name matching (when available)

Required Information on the Invoice

For reverse charge invoices, dVersum automatically adds:

"Steuerschuldnerschaft des Leistungsempfangers (Reverse Charge gemaess Art. 196 MwStSystRL)"

This information is legally required.

Tax Settings per Client

Access

1. Open the client
2. Click on Settings or the gear icon
3. Select the Taxes section

Available Settings

Changing the Tax Rate

1. Select the default tax rate:
   • 19% - Standard rate
   • 7% - Reduced rate
   • 0% - Tax-exempt
2. This rate is preselected for new documents
3. You can adjust it per invoice at any time

Country-Based Settings

Automatic Detection

Based on the client address:

1. Germany -> Standard VAT (19%)
2. EU country + VAT ID -> Reverse charge available
3. EU country without VAT ID -> Show notice
4. Non-EU country -> Tax-exempt option

Adjusting Country Settings

1. Go to Settings -> Taxes
2. Under Country rules you can set default behavior
3. These are automatically applied to new clients

Tax-Exempt Services

When Tax-Exempt?

Certain services are exempt from VAT in Germany:

• Medical treatments (Section 4 No. 14 UStG)
• Educational services (Section 4 No. 21 UStG)
• Insurance services (Section 4 No. 10 UStG)

Setup

1. Open the client
2. Enable Tax-exempt services
3. Select the reason for exemption
4. The notice text is automatically added to invoices

Required Notices

For tax-exempt invoices, the following appears automatically:

"VAT-exempt service pursuant to Section X No. Y UStG"

Small Business Regulation

If you yourself are a small business (Section 19 UStG):

Activation

1. Go to Settings -> Organization -> Taxes
2. Enable Small business regulation
3. All invoices will be created without VAT

Notice on Invoices

Automatic text:

"Gemaess Section 19 UStG wird keine Umsatzsteuer berechnet."

Effect on Clients

• Client-specific tax rates are ignored
• All invoices are net = gross
• Reverse charge is not applicable

Common Scenarios

Scenario 1: German Business Client

Settings:

• Country: Germany
• Tax rate: 19%
• Reverse charge: No

On the invoice:

• Net amount + 19% VAT
• No special notices

Scenario 2: Austrian Business Client

Settings:

• Country: Austria
• VAT ID: ATU12345678
• Reverse charge: Yes

On the invoice:

• Net amount only
• Notice: "Reverse Charge"
• VAT IDs of both parties

Scenario 3: Swiss Client

Settings:

• Country: Switzerland
• Tax rate: 0%
• Tax-exempt: Yes (non-EU country)

On the invoice:

• Net amount only
• Notice: "Tax-exempt export delivery/service"

Scenario 4: French Private Client

Settings:

• Country: France
• Type: Private client
• Tax rate: 19% (or French rate under MOSS)

On the invoice:

• Net amount + VAT
• For digital services, possibly French rate

Managing VAT IDs

Your Own VAT ID

1. Go to Settings -> Organization
2. Enter your VAT ID
3. This appears on all invoices

Client VAT ID

1. Under the client's Tax Settings
2. Enter in the format: DE123456789, ATU12345678, etc.
3. Automatic validation

Verification Log

For your records, dVersum stores:

• Date of verification
• Result (valid/invalid)
• Retrieved data

Tax Report

Creating an Overview

1. Go to Reports -> Taxes
2. Select the period
3. View:
   • Revenue by tax rate
   • Reverse charge revenue
   • Tax-exempt revenue

For the Tax Return

The report shows:

• Taxable revenue (19%, 7%)
• Intra-community supplies (reverse charge)
• Export deliveries (non-EU)

DATEV Export

Tax information is correctly encoded in the DATEV export:

• BU key for reverse charge
• Tax keys for different rates

Troubleshooting

VAT ID is shown as invalid

1. Check format - Correct country code?
2. VIES status - EU database may be temporarily unavailable
3. New number - Can take up to 2 weeks to become active

Incorrect tax rate on invoice

1. Check the client settings
2. Check the client's country
3. Was reverse charge correctly activated?

Reverse charge is missing

Check the requirements:

• Is the client a business client?
• Is the VAT ID entered and valid?
• Is the country an EU country (not Germany)?

Best Practices

1. Always validate VAT IDs - For new EU clients
2. Documentation - Keep verification logs
3. Update regularly - VAT IDs can change
4. When in doubt - Consult a tax advisor
5. Watch for country changes - Adjust settings when a client relocates