What is the VAT reverse charge mechanism and when does it apply?
Last updated: 2026-08-02·Verified: 2026-08-02
📋 Direct Answer
Reverse charge shifts VAT payment obligation from the seller to the buyer. It applies when: (1) B2B cross-border supplies within the EU, (2) B2B services from non-EU to EU, (3) certain domestic transactions. Seller charges 0% VAT and invoices with 'Reverse charge: customer pays VAT'. Buyer self-accounts for VAT. Simplifies compliance for cross-border B2B sellers.
1
Requirements
N/A
Est. Total Cost
Immediate
Timeline
Item by Item
RequiredReverse Charge ApplicationN/AImmediate
- 1For B2B intra-EU supplies: seller charges 0% VAT
- 2Include 'Reverse charge' notation on invoice
- 3Buyer self-accounts for VAT in their country
- 4Both parties must have valid VAT numbers
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- • EU VAT Directive Article 196
- • Reverse charge mechanism guidance
Disclaimer: This page is for informational purposes only and does not constitute legal or tax advice. Consult a professional for your specific situation.