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Voitto Knowledge Base

Reverse tax liability

Last updated: 2021-06-21

In most cases, it is the seller who is obliged to pay the VAT. Reverse tax liability, on the other hand, means that it is the buyer who is obliged to pay VAT.

Reverse tax liability occurs, for example, in the event that:

  • Most services to companies in the construction sector
  • Waste and scrap of certain metals
  • Emission allowances for greenhouse gas

For the seller, reverse tax liability means that “reverse payment liability” needs to be stated on the invoice. The seller is also entitled to a deduction for input VAT, even though no output VAT must be reported.

For the buyer, reverse tax liability means that he must calculate and report the VAT. The buyer may have the right to deduct all or part of the input VAT, which means that the VAT may be zero if you are entitled to deduct the entire amount.