Reverse Charge-Process

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These questions are answered:

How does the reverse charge procedure work?

The most important details for you at a glance

  • Reverse charge process:
    What does it mean?

    Your customer is located in a country other than your headquarters and asks for a reverse charge invoice? You are not sure what exactly to do here?

  • Learn everything you need to know about the reverse charge. Observe all tax requirements in order not to get your company into declaration difficulties with the tax office and, in the worst case, to a tax arrears payment.

How does the reverse charge process work?

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How to correctly transfer the tax liability

To ensure that you proceed correctly from a tax perspective, we will summarize the steps involved in the reverse charge procedure for you:

  • Normally a customer pays the VAT to the supplier, when he purchases products or services.

  • Im Reverse-Charge-Verfahren ändert sich dieser Prozess. The supplier issues an invoice to the customer, but the customer does not pay the VAT directly to the supplier.

  • Instead, the customer reports the transaction and the VAT due to the tax authorities. This is usually done in the Sales tax return.

  • The tax authorities collect the VAT from the customer and enter it as revenue.

  • The supplier indicates in his own VAT return that the transaction falls under the reverse charge procedure. This avoids that VAT is paid twice.

Which requirements do you have to consider?

The tax reversal procedure comes from §13 b of the Value Added Tax Act. Therefore, the same basis applies to domestic construction services. However, it is usually more relevant in the international sale of goods and services. Most often, the case occurs when a service is purchased from abroad in the EU.

  • Your invoices is a B2B invoice and the recipient is an entrepreneur in another EU country
  • You indicate a reference to reverse charge on the invoice
  • Tax number and/or VAT identification number of service provider and service recipient must be available and applied to the invoice
  • Invoice is shown purely net
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Reverse charge invoices with easybill

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It depends on the recipient: B2C or B2B?

Invoice to private person

  • The place of performance is where the registered office of the service provider is located.
  • Invoice is issued with VAT
  • Service provider pays the tax, in the country in which he is also registered for tax purposes

Invoice to entrepreneur

  • The place of performance is the country in which the service is rendered, i.e. at the service recipient’s premises
  • Invoice without sales tax, but reference to reverse charge
  • The recipient of the service pays the tax via his VAT return

Questions related to reverse charge and easybill

Although reverse charge invoices are subject to certain conditions, you should not be deterred. Talk to your tax advisor, experts and others who can answer all your questions.

We clarify the most important questions for you in advance.

Is the reverse charge invoice always addressed to an entrepreneur?

Yes, because the prerequisite is that the entrepreneur himself pays the tax via his own VAT return. In the case of a private individual, the tax liability is incurred in the country of the service provider and can therefore not be transferred.

Can easybill issue reverse charge invoices?

Of course, creating a tax-exempt B2B invoice is no problem in easybill. All tax options that might apply to your invoices are available via drop-down menu.

Will easybill support me in setting up the software?

Yes, because our outstanding support is available to you not only by telephone, but also at any time by e-mail. In a free telephone briefing, we will set up your account together with you. Thus, you will not forget any important information and can start your business absolutely safe.

Is everything included in the easybill package price?

At easybill, we want to offer you full transparency and control over your costs. However, please note that you must book the shipping credit separately and actively. Costs for additional employee access and finAPI transactions can be found in the price overview.

How does easybill guarantee the security of my data?

With easybill, your data is in the best hands. Your data is stored exclusively on servers in Germany and protected by modern encryption standards. As an additional safeguard, two-factor authentication (2FA) is available to you. Everything about account security in easybill.

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