Reverse Charge in E-Invoices Explained

Reverse charge (also called the reverse charge mechanism or VAT liability shift) means that not the supplier, but the recipient of the supply owes the VAT and remits it to the tax authority. The supplier therefore issues the invoice without VAT.

The most common B2B use case is the supply of services to businesses established in another EU member state. The supply is deemed to take place where the recipient is established, so VAT is declared and paid there. In addition, there are further, purely domestic reverse-charge cases.

Reverse charge in the e-invoice

In the XRechnung standard, reverse charge is represented using VAT category AE. In addition, a justification text stating at minimum reverse charge must be provided for the tax exemption. For an overview of all VAT categories, see VAT categories in e-invoices (S, Z, K, E, AE).

Category AE cannot be combined with other categories: if reverse charge applies, it applies to the entire invoice. Every line item is therefore assigned category AE.

Which e-invoicing solution supports reverse charge?

Not all of Codebarista's e-invoicing solutions support reverse charge yet:

• E-Invoicing for Shopware 6: Reverse charge is not yet supported and is on the roadmap.
• E-Invoicing for Shopware 5: Reverse charge is supported. For how to configure the tax exemption category, see the documentation.
• E-Invoicing for PrestaShop: Reverse charge is supported. For how to configure your shop accordingly, see the documentation.

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This content is for general information only and is not legal or tax advice. We make no representations or warranties regarding its accuracy, completeness, or currency. Any reliance on this information is at your own risk.