Reverse charge: the VAT liability shift explained

What is reverse charge?

Under the reverse-charge mechanism, the recipient of the service — not the supplier — owes the VAT. You issue the invoice without VAT, and your business customer accounts for the tax in their own country.

When does it apply?

Typically for B2B services to companies elsewhere in the EU — for example consulting, software, or design — and in certain cases with non-EU countries. It usually requires a valid VAT ID from your customer.

What goes on the invoice?

• No German VAT shown
• The note "Reverse charge — recipient liable for VAT"
• Your VAT ID and your customer's VAT ID

With Norman

Norman detects reverse charge from the customer's country and VAT ID, adds the note to the invoice automatically, and reflects the case in your VAT return and EC Sales List.