Term · VAT
Reverse-charge VAT (btw verleggen)
A scheme under which your client, not you, accounts for the VAT. It applies, among other things, to subcontracting in construction and to services for businesses in other EU countries.
You do not charge VAT on your invoice, but state 'VAT reverse-charged' (btw verlegd) and your client's VAT number. In your VAT return, you report the turnover in the section for reverse-charged supplies.
Your client reports the VAT and deducts it again in the same return. This way, no VAT can be lost if a subcontractor fails to pay it.