VAT reverse charge

VAT reverse charge is an anti-fraud measure which 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 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.

Netherlands specifics

Subcontracting-shifted VAT means that the VAT is shifted from the vendor to the customer of the goods and services. The vendor must indicate the base amount for which the tax is shifted in the VAT return. The customer must indicate the base amount and the VAT that is transferred in the VAT return.

Businesses that trade in gas and electricity certificates are obliged to shift VAT to their customers. The measure is to fight VAT fraud. The certificates come in various forms and are also known as Guarantees of Origin, Green (Gas) Certificates, Labeling Certificates, and Certificates of Origin.

Whether the reverse charge mechanism is applicable is determined by the time of supply of the certificates.

The reverse charge only applies to businesses that trade in the certificates, and end users who cancel the rights are not covered by this scheme.

How Infor meets this requirement

Ensure that the VAT reverse charge is enabled. See the Financials Setup and Administration Guide.

To create a Payables invoice record for VAT reverse, see the Payables User Guide.