Reverse-charging VAT: when do you use it?
Written by Ilias Aarrass7 min read · Published on · Last reviewed on 
In short
Reverse-charging VAT is mandatory in situations designated by law, such as subcontracting and hiring out staff in construction, cleaning and landscaping, services to EU businesses, and waste and scrap.
- You cannot opt into it: if your situation falls outside the list, you simply charge VAT.
- On the invoice you state 'VAT reverse-charged', the amount excluding VAT and your customer's VAT identification number.
- Reverse-charged turnover to a Dutch customer goes in box 1e; to an EU business in box 3b plus the EU sales listing.
- You never reverse-charge to private customers: they have no VAT number and file no return.
Normally you charge VAT to your client and remit it to the tax authorities. But in certain situations you may not charge VAT and the VAT shifts to your client. That's called the reverse-charge scheme. This article explains when you must reverse-charge VAT and how to draw up the invoice correctly.
What is reverse-charged VAT?
Reverse-charged VAT means the obligation to calculate and remit VAT shifts from you, the supplier, to your client, the customer. You send an invoice without VAT and state that the VAT is reverse-charged. Your client calculates the VAT themselves and declares it in their own return.
When must you reverse-charge VAT?
The reverse-charge scheme applies in specific, designated situations. The best known are subcontracting and lending staff in construction, shipbuilding, cleaning and landscaping, and doing business abroad, such as a translator working for a foreign agency. It also applies to, among other things, waste and old materials, certain electronics, and the sale of real estate.
What do you put on the invoice?
With reverse-charged VAT you put on the invoice the text 'VAT reverse-charged', the amount excluding VAT, the VAT rate that would normally apply, and your client's VAT identification number. Always check that your client is a business with a valid VAT number, for example via the VIES check. If the number is wrong, the tax authorities can still hold you liable for the VAT.
How do you process it in your return?
As the supplier you state the turnover on which you reverse-charged VAT in your VAT return, but you don't remit VAT. You can still reclaim VAT on your own costs for that job. If you're the customer to whom VAT was reverse-charged, you calculate the VAT yourself and declare it, after which you usually deduct it again as input tax in the same return.
The situations where the reverse charge applies
Reverse-charging means your customer declares the VAT instead of you. It applies only in situations designated by law; you cannot opt into it voluntarily.
| Situation | Who declares the VAT |
|---|---|
| Subcontracting in construction or shipbuilding | The main contractor |
| Hiring out staff for physical work | The hirer |
| Service to a business in another EU country | Your EU client |
| Buying services from abroad | You, as the customer |
| Supplying waste and scrap metals | The customer |
| Sales to private individuals | Never reverse-charged: you charge VAT as normal |
Reverse-charged to you: also something to declare
It works both ways. If you buy software, advertising or services from a foreign supplier, the invoice says VAT reverse-charged and you must declare that VAT. You deduct it in the same return, so on balance you pay nothing, but both lines must be completed. See also VAT with clients abroad and the reverse charge in construction.
Frequently asked questions
What does reverse-charging VAT mean exactly?
That the customer declares the VAT instead of the supplier. You invoice without VAT, stating 'VAT reverse-charged' and your customer's VAT number; they declare the VAT and usually deduct it in the same return. If you receive such an invoice yourself, receiving reverse-charged VAT explains how to book and declare it.
Can I choose whether to reverse-charge?
No. The reverse charge applies only in situations designated by law, such as subcontracting in construction or services to EU businesses. Outside those you charge VAT as normal; inside them, reverse-charging is mandatory.
What goes on a reverse-charged invoice?
The words 'VAT reverse-charged', your customer's VAT identification number and the amount without VAT. Plus all the usual invoice requirements. Without a valid customer VAT number you may not reverse-charge.
Which return box holds reverse-charged turnover?
Turnover you reverse-charge to a Dutch customer goes in box 1e. To an EU business, it goes in box 3b plus the EU sales listing. VAT reverse-charged to you is declared in box 2a or 4a and deducted in 5b.
Does the reverse charge apply to private customers?
No, never. A private individual has no VAT number and files no return. You always charge normal Dutch VAT to private customers, whatever the sector.
What if I wrongly charge VAT instead of reverse-charging?
Then your customer cannot deduct that VAT while you still owe it. Correct with a credit invoice and a new invoice; see credit invoice.
Sources
- When to reverse-charge VAT: the designated situationsBelastingdienst · belastingdienst.nl
- Charging VAT on services to customers in other EU countriesBelastingdienst · 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.
