VAT reverse-charged to you: how to book it and how to declare it
Written by Ilias Aarrass6 min read · Published on · Last reviewed on 
In short
If you receive an invoice with VAT reverse-charged, you declare that VAT yourself in box 2a, 4a or 4b and deduct the same amount in box 5b; nil on balance, unless you are not fully entitled to deduct.
- Domestic reverse charge goes in box 2a, goods from the EU in 4a and services from inside or outside the EU in 4b.
- You calculate the VAT yourself at the Dutch rate, usually 21 per cent of the invoice amount.
- Under the small businesses scheme, with exempt supplies or private use you genuinely pay the reverse-charged VAT.
- Check whether your supplier is right to reverse-charge; otherwise ask for a corrected invoice.
An invoice comes in from a subcontractor, a German supplier or a software company in Ireland. No VAT on the invoice, but the words VAT reverse-charged. Many freelancers book such an invoice as a cost and think no further. Yet there certainly is VAT, only now you are the one declaring it. This article sets out which box the amount belongs in per situation, how to book it in your records, and in which cases that reverse-charged VAT really costs you money.
Three situations, three boxes
Reverse-charged VAT comes from three directions: from a Dutch supplier where the reverse-charge scheme applies, from a supplier of services abroad, and when buying goods from another EU country. The box in your return differs per case; the deduction always runs through box 5b.
| You receive an invoice from | Declare in | Deduct in |
|---|---|---|
| A Dutch subcontractor (construction, metal, hiring out staff) | box 2a | box 5b |
| A service provider in another EU country | box 4b | box 5b |
| A service provider outside the EU | box 4b | box 5b |
| Goods from another EU country | box 4a | box 5b |
How to book it
In your books you record the cost at the full invoice amount, because it contained no VAT. Alongside that you make two opposite VAT entries: a liability for the VAT you declare and a receivable for the same VAT you deduct. Good software does that automatically once you pick the right VAT code; in a spreadsheet you add two columns for it.
Worked example: a € 3,000 invoice with reverse-charged VAT
- Cost (subcontracting)
- € 3,000
- VAT to declare yourself, 21%
- € 630 in box 2a
- The same amount as input VAT
- € 630 in box 5b
- Effect on the VAT you pay
- € 0
Result: Nil on balance, but both lines must appear in your return. Booking only the cost and omitting the VAT makes the return incorrect
When it does cost you money
The deduction in box 5b only cancels out the declaration in 2a, 4a or 4b if you may deduct that VAT in full. That is not always the case, and then reverse-charged VAT suddenly becomes a real cost.
- You are in the small businesses scheme. You may not deduct input VAT, but you must still declare and pay reverse-charged VAT. You will be invited to file a return for that.
- You provide exempt services, for example in healthcare, education or childcare. Then too you genuinely pay the reverse-charged VAT.
- You use the purchase partly privately. You then deduct only the business share and pay on the rest.
- You have mixed turnover: partly taxed, partly exempt. The deduction follows that ratio.
Is your supplier reverse-charging correctly?
Check whether the reverse charge is correct before you adopt it. Within the Netherlands it applies only in specific situations, such as subcontracting in construction and hiring out staff. If a supplier wrongly marks an invoice as reverse-charged when normal VAT was due, ask for a corrected invoice; otherwise you miss out on the deduction. When do you reverse-charge VAT lists every situation.
The check you run every quarter
Before filing, go through your purchase invoices without VAT and ask per invoice why there is no VAT on it. There are only four answers: reverse-charged, zero-rated, exempt, or the supplier applies the small businesses scheme. Only in the first case do you have to declare something. This check takes five minutes and catches most errors.
Forgot it for a few quarters? The effect is usually nil euros, but your returns were wrong. Correct it in your next return if the difference stays under a thousand euros; above that you file a supplementary return. Afterwards give reverse-charged purchases their own ledger account, so you see them immediately at every check before your return.
Frequently asked questions
I have an invoice with reverse-charged VAT. Do I need to act if I can deduct everything?
Yes. You declare the VAT in box 2a, 4a or 4b and deduct the same amount in 5b. On balance you pay nothing, but both lines belong in your return.
Which VAT rate do I use for the reverse-charged VAT?
The Dutch rate applying to that service or those goods, usually 21 per cent. You calculate it over the amount on the invoice, because that contained no VAT yet.
I use the small businesses scheme. Do I still have to file?
For reverse-charged VAT, yes. You declare and pay it, with no right to deduct. If you regularly buy foreign services, work out whether the scheme is still worthwhile.
My software subscription comes from the United States. Is that reverse-charged too?
Yes, services from outside the EU to a Dutch business are declared in box 4b and deducted in 5b. See deducting software and AI subscriptions.
Do reverse-charged purchases also go in my EU sales listing?
No. The EU sales listing covers only what you supply to EU businesses, not what you buy. Your supplier reports that purchase in his own country.
Sources
- How reverse-charging VAT worksBelastingdienst · belastingdienst.nl
- Reverse charge for subcontracting and hiring out staffBelastingdienst · belastingdienst.nl
- Reverse charge when trading abroadBelastingdienst · belastingdienst.nl
Sources checked on
This article provides general information based on the rules known for 2026 and does not replace personal tax advice. For your specific situation, we're happy to take a look with you.
