How to Create an Invoice with VAT Reverse Charge
Complete guide to creating reverse charge invoices for EU B2B transactions. Learn when to use it, required elements, and how to set it up in PayRequest.
27
EU Member States
0%
VAT on Invoice
B2B
Transactions Only
100%
Compliant
What is VAT Reverse Charge?
The VAT reverse charge mechanism shifts the responsibility for reporting VAT from the seller to the buyer. Instead of the seller charging VAT on the invoice, the buyer accounts for the VAT in their own country. This simplifies cross-border B2B transactions within the EU by eliminating the need for sellers to register for VAT in every country where they have customers.
Shifts VAT Responsibility
The buyer declares and pays VAT in their own country, not the seller.
B2B Only
Only applies to business-to-business transactions, never B2C.
Cross-Border EU
Used for services and goods between EU member states.
Simplified Compliance
No need to register for VAT in your customer's country.
When to Use Reverse Charge
These scenarios require a reverse charge invoice
Cross-Border B2B Services within EU
When you provide services to a VAT-registered business in another EU country. This is the most common use case.
Example: Dutch agency invoicing a German company for consulting services
Intra-Community Supply of Goods
When you sell and ship goods to a VAT-registered business in another EU member state (intracommunautaire levering).
Example: French wholesaler selling products to a Belgian retailer
Construction Services (Domestic)
In some EU countries, reverse charge applies to domestic construction and building services between businesses.
Example: Subcontractor invoicing a main contractor for construction work in NL
Digital Services to EU Businesses
SaaS, software licenses, and digital services provided to VAT-registered EU businesses.
Example: Irish SaaS company invoicing a Spanish business for software subscription
When NOT to Use Reverse Charge
Regular VAT rules apply in these situations
B2C Transactions
Sales to consumers (individuals without a VAT number) always require you to charge VAT at the applicable rate.
Domestic B2B Sales
Sales to businesses in your own country typically require standard VAT (except for specific sectors like construction).
Customer Without Valid VAT Number
If you cannot verify the customer's VAT number, you must charge VAT. Always validate VAT numbers before applying reverse charge.
Sales to Non-EU Countries
Exports outside the EU are zero-rated (0% VAT) but this is NOT reverse charge. Different rules and documentation apply.
Required Invoice Elements
Your reverse charge invoice must include these elements
Your VAT Number
Your full VAT identification number (e.g., NL123456789B01)
Customer's VAT Number
The buyer's valid VAT number - verify this before invoicing
Reverse Charge Statement
Clear mention that reverse charge applies (e.g., 'VAT reverse charge' or 'BTW verlegd')
0% VAT Rate Shown
Show VAT as 0% or €0.00 - never leave it blank
Invoice Number
Unique, sequential invoice number for your records
Invoice Date
Date the invoice was issued
Clear Description
Description of goods or services provided
Net Amount
Total amount excluding VAT (which will be the same as the total)
Example Reverse Charge Invoice
See how a properly formatted reverse charge invoice looks
| Description | Amount |
|---|---|
| Consulting Services - January 2026 | €2,500.00 |
VAT is not charged on this invoice. Under the reverse charge mechanism, the recipient is liable for the VAT in their country of establishment.
Create a Reverse Charge Invoice in PayRequest
Step-by-step guide to set up reverse charge invoicing
Add Customer with VAT Number
Create your customer and enter their EU VAT number. PayRequest automatically validates the VAT number via the EU VIES database.
Enable Reverse Charge
When creating an invoice, select 'Reverse Charge' as the VAT type. PayRequest will automatically set VAT to 0%.
Add Line Items
Add your products or services. The system will show 0% VAT and include the proper reverse charge notation.
Review and Send
PayRequest automatically adds the required reverse charge statement to your invoice. Review and send to your customer.
Frequently Asked Questions
Common questions about reverse charge invoicing
Q:How do I verify a customer's VAT number?
Use the EU VIES (VAT Information Exchange System) database at ec.europa.eu/taxation_customs/vies. PayRequest automatically validates VAT numbers when you enter them. Always keep proof of validation for your records.
Q:What if my customer doesn't have a valid VAT number?
If the customer cannot provide a valid VAT number, you must charge VAT at the applicable rate (either your country's rate or the customer's country rate depending on the type of supply). Reverse charge cannot be applied.
Q:Do I need to report reverse charge sales?
Yes, you typically need to report these sales in your EC Sales List (Intracommunautaire Prestaties/Leveringen in Dutch). Check with your accountant for specific reporting requirements in your country.
Q:Can I use reverse charge for B2C sales?
No, reverse charge only applies to B2B (business-to-business) transactions. Sales to consumers always require you to charge VAT.
Q:What's the difference between reverse charge and zero-rated exports?
Reverse charge applies to EU B2B transactions - the buyer accounts for VAT. Zero-rated exports apply to sales outside the EU - no VAT is charged or accounted for. Different documentation and reporting requirements apply to each.
Q:What statement should I put on a reverse charge invoice?
Include a clear statement such as: 'VAT reverse charge applies - the recipient is liable for the VAT' or in Dutch: 'BTW verlegd naar afnemer'. PayRequest adds this automatically when you select reverse charge.
Simplify Your EU Invoicing with PayRequest
PayRequest handles VAT compliance automatically. Create compliant reverse charge invoices, validate VAT numbers, and manage your EU B2B billing with ease.
- Automatic VAT number validation via VIES
- One-click reverse charge invoicing
- Compliant invoice templates
- EU VAT reporting ready
- 20+ payment methods including SEPA