Reverse Charge VAT is a mechanism where the responsibility for reporting and paying VAT is shifted from the seller to the buyer. This approach is commonly used for specific transactions, such as intra-EU sales and certain domestic sales in the Netherlands.
When is Reverse Charge VAT applicable in the Netherlands?
In the Netherlands, Reverse Charge VAT applies to specific services or products as defined by Dutch tax authorities. Examples include subcontracting services in construction. It is primarily applicable for:
- 9% VAT rate services
- 21% VAT rate services
For domestic transactions, Reverse Charge VAT must be enabled manually in your account. For intra-EU transactions, the mechanism is enabled by default if both the end-customer and the Xolo customer have valid VIES VAT numbers during the creation of the SAIN.
How does Reverse Charge VAT work?
- The seller does not charge VAT on the invoice.
- The buyer is responsible for reporting and paying the VAT to the tax authorities.
How does Reverse Charge differ from intra-EU Reverse Charge VAT?
- Domestic Reverse Charge VAT: Applies to specific services or products within the Netherlands.
- Intra-EU Reverse Charge VAT: Applies to cross-border transactions between EU member states, provided both parties have valid VAT numbers registered in the VIES system.
How can I use Reverse Charge VAT in Xolo?
- Domestic Reverse Charge VAT:
- Disabled by default. Contact our support team at hulp@xolo.io to enable this feature in your account. Once activated, you will have access to new article types and tax rates specific to Reverse Charge VAT for domestic transactions.
- Intra-EU Reverse Charge VAT:
- Enabled automatically if both the end-customer and the Xolo customer have valid VIES VAT numbers at the time of creating the SAIN.