When do you apply reverse-charge VAT?
Short answer
You shift the VAT to your customer when you supply services to a business in another EU country, and in the Netherlands in cases such as subcontracting in construction. You don't charge VAT yourself: the invoice states 'btw verlegd' (VAT reverse-charged) and your customer's VAT number, and your customer declares the VAT.
Updated on · Reviewed by the tax advisers at Boekhoudvriend
With reverse-charge VAT (btw verlegd), the obligation to pay the VAT moves from you to your customer. For you, this means no VAT on the invoice, but you do report the turnover in your VAT return in the box for reverse-charged supplies.
The main situations
- Subcontracting in construction: you work as a subcontractor for another contractor
- Hiring out staff in construction and shipbuilding
- Services to businesses in other EU countries (which you also report in the intra-Community supplies listing (opgaaf ICP))
- Supplies of certain goods, such as scrap metal and waste
What must be on the invoice?
Put the words 'btw verlegd' on your invoice, together with your customer's VAT identification number. For customers in the EU, check that the number is valid using the European Commission's VIES check, and keep a record of that check with your accounts.
Sources
- Belastingdienst: the reverse-charge scheme (in Dutch)
- Belastingdienst: VAT when doing business abroad (in Dutch)
This answer is general information, not personal advice. Your own situation may work out differently, so feel free to ask our team.