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VAT reverse charge as a construction subcontractor: how it works
Written by Ilias5 min read
If you often work as a construction freelancer for other contractors, you deal with the VAT reverse-charge scheme. Many starting entrepreneurs find this difficult: you don't charge VAT, but you do have to declare something. In this article we explain exactly how reverse-charging works, what should be on your invoice and how you process it in your VAT return.
When does the reverse-charge scheme apply?
The reverse charge applies if, as a subcontractor, you perform work of a physical nature for a main contractor or another entrepreneur in construction. Think of bricklaying, carpentry, installation or groundwork that's part of a larger construction project. The main contractor is then responsible for declaring the VAT.
The scheme doesn't apply if you deliver directly to a private individual; then you charge normal VAT. The reverse charge usually also doesn't apply when supplying only materials without installation. It's about the combination of work and position in the chain.
What do you put on your invoice?
On your invoice you don't state a VAT amount, but the text 'VAT reverse-charged'. You also put your client's VAT identification number on it. The rest of the invoice is normal: your details, the invoice number, the date, the description of the work and the amount excluding VAT.
Keep these invoices well and make sure your client's VAT number is correct. A missing statement or a wrong number can cause problems during an audit.
How do you declare it?
In your VAT return you enter the turnover for which you reverse-charged the VAT in the section for reverse-charge schemes (usually section 1e: supplies where the levy has been reversed). You don't pay VAT on this turnover yourself, but you do report the amount.
The VAT on your own purchases and costs can be reclaimed as input VAT as usual. A good bookkeeper or bookkeeping program with a construction setting helps you fill this in flawlessly.
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.
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