When you trade in goods or services, you normally pay VAT to the Dutch Tax Authority. However, in certain cases, you don’t have to pay this VAT yourself—instead, the entrepreneur you’re doing business with is responsible for paying it. This is called the reverse charge VAT scheme. As the supplier, you shift the VAT liability to the buyer, who then becomes responsible for reporting and paying the VAT.
Normally, as an entrepreneur, you pay VAT on the goods or services you provide to the Dutch Tax Administration. However, in some situations, this works a bit differently: the VAT is not paid by you, but by the customer. This is called the VAT reverse charge mechanism.
You ‘reverse charge’ the VAT to the customer, who then becomes responsible for reporting and paying the VAT. This arrangement usually applies to business clients. For example, in construction services, subcontracting, or international trade within the EU. On your invoice, you must state that the VAT has been reversed. You do not charge VAT in these cases.
The benefit? For the tax authorities, this makes VAT collection easier to control. And as an entrepreneur, you do not have to pre-finance the VAT.
- State that the VAT has been reversed (e.g., “VAT reverse charge”).
- Do not include a VAT amount on the invoice.
- List the buyer’s VAT number.
- Ensure the buyer processes the VAT correctly in their own administration.
You cannot use the reverse charge scheme in all industries. Below is an overview of sectors where it is allowed:
Waste and scrap materials – Such as scrap metal and recyclable materials.
Electronics – Including mobile phones, computer chips, game consoles, laptops, and tablets.
Construction sector – In cases of subcontracting and outsourced work.
Real estate – Certain services related to real estate.
Temporary staffing – When employees are leased to another business.
Doing business abroad – VAT is often reversed in transactions with EU-based entrepreneurs.
The reverse charge scheme always applies to the entire invoice amount.
As the supplier, you remain responsible for proper invoicing and bookkeeping.
The buyer must calculate and remit the VAT to the tax authority themselves.
Always check whether the reverse charge scheme is applicable in your situation to avoid errors and potential tax corrections.
By applying the reverse charge VAT scheme correctly, you avoid unnecessary costs and ensure your VAT administration is compliant. Make sure you fully understand and follow the rules!
If you have any questions about filing a VAT supplementary return or if you're unsure whether you need to file one, DKB-finance is here to help.
Feel free to contact us!
