The reverse charge procedure is a mechanism in VAT law that shifts the tax liability from the service provider to the service recipient. This means that it is not the seller but the buyer who has to pay the VAT to the tax office.
The reverse charge procedure is used for cross-border services. The recipient of the service must be an entrepreneur or a legal entity with a valid VAT identification number (VAT ID no.).
Invoicing:
The service provider issues an invoice without VAT and indicates that the recipient is liable for the tax. The reference to the reverse charge procedure is noted on the invoice.
Tax return:
The recipient of the service must calculate the VAT and declare it in their advance VAT return. At the same time, the service recipient can claim this VAT as input tax if they are authorised to deduct input tax.