VAT reverse charge

VAT reverse charge is an anti-fraud measure that applies to the sale and purchase of specific goods and services.

These are typically high value, portable electronics such as mobile phones. The reverse charge procedure holds the purchaser liable to account for the VAT on the sale.

VAT is not charged by the vendor. The invoice must show the value of VAT that is due under the reverse charge rules. It must state that the reverse charge applies, and that the trading account customer is required to account for the VAT.

Mexico specifics

The reverse charge applies to certain supplies of goods and services. Under this provision, a taxable person that receives a supply must withhold the VAT that is due from the supplier and must pay the VAT. The reverse charge applies to a variety of transactions, including these:

  • Fees paid by companies to individuals
  • Acquisition of scrap materials
  • Ground transportation of goods
  • Commission paid by companies to individuals
  • The lease or acquisition of tangible goods from residents abroad

How Infor meets the requirement

You must enable the VAT reverse process.

Perform these tasks to process VAT reverse charges:

See Enabling the VAT/GST reverse indicator.

See Creating Payables invoice record.