Reverse Charge
Definition
CAUTION!
The following description does not contain any information on applicable tax law. For more information on the reverse charge procedure or intra-Community deliveries, please contact your tax advisor or auditor.
The reverse charge procedure refers to a special provision in German VAT law whereby, in certain cases, VAT is paid by the recipient of the service ( customer) rather than the service provider (company). This reversal of tax liability is applied to cross-border business transactions within the EU, e.g. when a company based in another EU country provides a service to a German customer. If it is a so-called intra-Community supply, where more than 50 percent of the invoice amount is attributable to spare parts, the transaction may even be exempt from VAT.
In TRASER DMS 365, VAT business posting groups can be set up so that when a service invoice is posted, the system automatically checks whether the invoice meets the requirements for the reverse charge procedure or intra-Community deliveries. This check is only performed for customers in the corresponding VAT business posting group. If the requirements are not met, the invoice is posted according to the regular VAT posting matrix setup. This reduces administrative effort and simplifies invoicing.