Hanoutax

Under the reverse charge, it is the purchaser, not the supplier, who accounts for the VAT due. The mechanism is common in trade between EU businesses, but it generates many errors, often discovered during an audit.

The most common mistakes

• Mention missing on the invoice: an invoice issued without the expected reverse charge or exemption mention can be challenged.
• Wrong customer classification: treating a sale to a consumer as a business-to-business sale, or the opposite.
• Unchecked VAT number: an invalid number undermines the exemption.
• Missed deduction: reverse-charged VAT must be declared and then, if the right exists, deducted in the same return.
• Recapitulative statement omitted: intra-EU transactions must also appear in the dedicated returns.

How to protect yourself

A clear treatment sheet for each type of transaction, a check of VAT numbers and a regular reconciliation between invoices and returns are enough to avoid most errors. Hanoutax advises you on these points: see the VAT reverse charge page and the invoice compliance review.