What is VAT transfer?
Reversal of VAT is exactly what the term says: the VAT liability is transferred from one party to another. When the VAT is reversed, it is not the supplier, but the customer who must calculate the VAT and transfer it to the tax authorities. The receiving entrepreneur (customer) can deduct the VAT directly as input tax, so that no VAT actually has to be paid.
When is VAT transferred?
The question is: when is the VAT refunded? We list the most common situations for you:
- To trade abroad
- Lending and subcontracting of personnel within the construction, cleaning, shipbuilding, landscape and industrial sectors
- Sale of mobile phones, chips, game consoles, laptops and tablets
- Delivery of real estate
- On certain foreclosures and sales
- gold sale
- Delivery of electricity and gas certificates
- Transfer of quotas
- Telecommunications services that take place in the Netherlands between entrepreneurs providing these services
- Services and supplies related to waste and old materials
The reverse VAT mechanism is not optional, but must be applied compulsorily. Do you know if you should switch or not? Then use the Tax Authorities’ tool.
Create customized invoice
When you transfer the VAT, you must of course state this carefully on the invoice and also process it in your accounts. If you reverse the VAT, there are a number of things you indicate on the invoice so that it is clear to everyone that the VAT amount has been reversed. In the case of reverse VAT payment obligation, it is always clearly stated on the invoice ‘reverse VAT payment obligation’.
As a supplier, you must of course not charge VAT or state this on the invoice. You may also not enter a VAT rate of 0%. This is actually intended for a number of specific goods and services. In addition, the supplier also states the Chamber of Commerce number and the customer’s VAT number on the invoice.
Complete VAT declaration
In the case of reverse VAT liability, you must complete the VAT declaration as follows:
1. The VAT has been transferred to you:
In the VAT return, you fill in the VAT number, VAT amount and the refund. You enter this in section 2 ‘Reverse charge schemes at home’ or in section 4 ‘Services performed for you from abroad’.
2. Reverse obligation to pay VAT as an entrepreneur:
In the VAT declaration to the tax authorities, you fill in the turnover for which the VAT has been refunded. Make sure you choose the right section for doing business abroad (within or outside the EU) or domestically.
When transferring VAT to a Dutch customer, you enter the turnover in section 1 ‘Domestic performance’ in section 1e ‘Supply/services taxed at 0% or not taxed at your home’.
When transferring VAT to an entrepreneur from another EU country, you enter the turnover in section 3 ‘Performance to or abroad’ in section 3b ‘Deliveries to or services in countries within the EU’ or in section 3c ‘Installations/distance sales within EU’ ‘.
Use an accounting program
Do you use an accounting program? Then the VAT declaration is much easier. You can easily specify the treatment of the reverse chargeable invoices in the accounting program.
A code has been created for this in the software so that the VAT rates end up in the correct section of the VAT return. The required fields are filled in automatically, such as VAT registration number, amount and deductible VAT.
If VAT has been charged on goods or services that you use for taxable business, you can deduct the reverse VAT. In the same VAT declaration, you fill in the reverse payment obligation and the deductible VAT. You then pay zero euros in balance.
As a supplier, do you want to transfer the VAT to an entrepreneur established in the Netherlands or abroad? And will you incur costs as a result of the work to be done? You can then deduct the VAT you pay from this from the tax authorities as input VAT.
Please note that the entrepreneur who wishes to transfer the VAT remains responsible. De Zaak therefore advises you to always find out in advance whether the other party to whom you transfer the VAT is entitled.
Made a mistake by moving the invoice VAT?
If you have made a mistake and mistakenly sent an invoice with VAT, you must always state the invoiced VAT amount. In addition, the customer must also pay the VAT and cannot subsequently deduct it as input tax.