When invoicing delivered goods or services to a customer abroad within Europe, VAT must be reverse charged. This means that you do not have to pay VAT, but that your customer must arrange for VAT to be paid in the country of establishment.
Below is an example of flower arrangements delivered and work carried out by a florist from Zwijndrecht - Belgium to a company in Rotterdam - the Netherlands.
Invoice layout
First of all, we must ensure that we use an Invoice layout that includes all mandatory information and also indicates that VAT has been reverse charged.
The design shown contains the country of establishment, plus your customer's VAT number. The footer within the design also contains a statement that VAT has been reverse charged.
We have saved this Invoice layout with the name 'Reverse charged Vat'.
Invoice with reverse charge VAT
We are now going to create an invoice for delivered products and services:
Make sure that the Invoice layout is selected, which we created specifically for invoicing 'Reverse charged Vat':
When entering the invoice details, we must select the VAT rate to be applied, see the following example:
In the example shown, we select VAT code 7 with the description “BE and EU – Reverse VAT Low rate, Rate: 21%” and we do this for the other invoice details. Make sure you use the correct rates here.
Ultimately we have the following Invoice concept:
The example shown shows that the VAT amount is €0.00. When the invoice is now made 'Final', the invoice also shows the footer line referring to the fact that VAT has been reverse charged.
Vat declaration
If we now look at how this invoice has been processed within our VAT return, we see that Box 45 “Sales, VAT must be paid by the co-contractor” €2224.95 and Box 72 “Balance of the previous boxes, payable by the state ” €0.00.
