Reverse Charge (Steuerschuldnerschaft)

The reverse charge procedure (reversal of VAT liability) is an important concept for EU B2B transactions. dVersum automatically detects reverse charge cases and creates the invoice accordingly.

What Is Reverse Charge?

With reverse charge, the tax liability is transferred from the service provider to the recipient. This means:

• You issue your invoice without VAT (0%)
• Your client pays the tax in their own country
• You must include a corresponding note on the invoice

When Does Reverse Charge Apply?

Reverse charge applies automatically when all of the following conditions are met:

1. Business client (B2B) - Your client is a company
2. EU country - Your client is based in another EU country (not Germany)
3. Valid VAT ID - Your client has a valid VAT identification number (USt-IdNr.)

Examples

Setting Up in dVersum

Step 1: Mark Client as Reverse Charge

1. Open the client under Clients
2. Go to the Tax Settings section
3. Enable Reverse Charge
4. Enter the client's VAT ID (USt-IdNr.)
5. Select the client's Country

Step 2: Create Invoice

When you create an invoice for a reverse charge client:

• The tax rate is automatically set to 0%
• The note "Reverse charge - VAT liability transfers to the recipient" (Steuerschuldnerschaft des Leistungsempfangers) is inserted
• The client's VAT ID appears on the invoice

Mandatory Notes on the Invoice

The following details must appear on reverse charge invoices:

1. Your VAT ID (not just the tax number)
2. Client's VAT ID
3. Reference to reverse charge

The standard note reads:

"Reverse charge - VAT liability transfers to the recipient pursuant to §13b UStG" (Steuerschuldnerschaft des Leistungsempfangers, Reverse Charge gem. §13b UStG)

Verifying VAT IDs

Before creating a reverse charge invoice, you should verify your client's VAT ID:

1. Use the EU VIES system
2. Document the verification
3. Save the verification result

Important: If the VAT ID is invalid, you must invoice with the German tax rate!

EC Sales List (Zusammenfassende Meldung)

Reverse charge transactions must be reported in your EC Sales List (Zusammenfassende Meldung) to the Federal Central Tax Office (Bundeszentralamt fur Steuern). Reporting is done:

• Monthly or quarterly
• Electronically via ELSTER
• Including all intra-community transactions

Frequently Asked Questions

What if my client doesn't have a VAT ID?

Then it is a private customer (B2C). In this case:

• Invoice with the German tax rate
• Or check the application of the OSS procedure

Does reverse charge apply to Switzerland?

No, Switzerland is not an EU member. Different rules apply for Swiss clients (third-country export).

What about the United Kingdom (UK)?

Since Brexit, the UK is considered a third country. Reverse charge is no longer applicable.

dVersum Tip

Mark your EU business clients as "Reverse Charge" once - dVersum takes care of the rest automatically for every future invoice.