Reverse Charge in Germany 2026: What GmbH Owners and Freelancers Need to Know

What Is the Reverse Charge Procedure?

The reverse charge procedure (§13b UStG) flips the VAT liability: instead of the supplier remitting VAT to the tax authorities, the recipient of the service is responsible for declaring and paying it. In practice, this means you receive an invoice without VAT — and must account for the tax yourself.

The rationale is practical: it would be difficult to enforce German VAT obligations on foreign companies. Instead, the German recipient handles the tax — and can typically recover it immediately as input VAT, resulting in a net-zero tax impact for fully VAT-registered businesses.

When Does §13b UStG Apply?

The reverse charge procedure applies in the following common situations:

• Purchasing services from EU businesses (e.g. software licences, online advertising, consulting)
• Construction services when your business also provides construction services on a sustained basis
• Supply of mobile phones and tablets when a single invoice exceeds €5,000 net
• Building cleaning services received from subcontractors in the cleaning sector
• Transactions involving emission allowances

Key point: reverse charge applies only in B2B transactions. Private individuals are not affected.

How to Recognise a Reverse Charge Invoice

A correct reverse charge invoice shows no VAT amount. Instead, it includes a note such as "Reverse charge" (on English-language EU invoices) or "Steuerschuldnerschaft des Leistungsempfängers gemäß §13b UStG" (on German-language invoices). You receive a net invoice — and calculate, report and reclaim the VAT yourself.

How to Book Reverse Charge Transactions

When you receive a reverse charge invoice, you book both the output VAT and the input VAT yourself. Example: you purchase a cloud software licence from an Irish SaaS provider for €1,000 net.

• Expense (software licence): €1,000
• Output VAT §13b (liability to tax office): €190
• Input VAT §13b (receivable from tax office): €190

Net tax effect: zero. But both entries must appear in your VAT pre-return (UStVA). In the DATEV SKR03 chart of accounts, accounts 1787 and 1577 are used for EU-sourced services.

Reporting Reverse Charge in the VAT Pre-Return (UStVA)

In the UStVA, §13b transactions are reported in the lines dedicated to services received where the tax liability transfers to the recipient (lines 48–52, depending on the case). The corresponding input VAT goes in line 67. Both entries are expected — omitting either will raise questions during a tax audit.

If you issue reverse charge invoices to EU B2B customers, you must include the reverse charge note on every invoice. This applies equally to e-invoices — the notation is required regardless of format.

Common Mistakes to Avoid

• Not recording the invoice because no VAT is shown — easy to miss with automated invoice imports
• Forgetting to claim input VAT — you're giving the tax office money you're entitled to reclaim
• Missing the reverse charge note on outgoing invoices to EU B2B customers
• Applying the wrong VAT rate — check whether 7% or 19% applies for mixed-service invoices

Conclusion

Reverse charge is unavoidable for any GmbH, UG or freelancer working with EU business partners. The bookkeeping is rule-based and manageable — but every §13b transaction must be correctly captured for your VAT returns and annual accounts to balance.

Norman's AI-powered bookkeeping automatically identifies reverse charge transactions and categorises them correctly — so nothing slips through the cracks at reporting time.