What it means
Under the reverse-charge mechanism, the business customer accounts for the VAT in its own country instead of you charging it. You invoice the net amount with 0% VAT, and the customer reports the VAT in its return.
When it usually applies
- Your customer is a VAT-registered business, not a consumer
- Your customer is established in a different EU country from you
- The supply is a service or goods covered by the cross-border B2B rules
What to put on the invoice
- Your VAT number and your customer's VAT number
- VAT rate 0% on the relevant lines
- A note such as "VAT reverse charged" referring to the reverse-charge rule
In the Invoice Generator King generator, set the line rate to 0% and press "Insert EU reverse-charge note" in the notes section.
Check the VAT number
Before applying reverse charge, check your customer's VAT number in the European Commission's VIES database. It is quick and protects you if the number turns out to be invalid.
This is general information, not tax advice — see the disclaimer.