{"id":2101,"date":"2021-08-25T03:35:02","date_gmt":"2021-08-25T01:35:02","guid":{"rendered":"https:\/\/www.accountable.de\/?p=2101"},"modified":"2026-09-21T10:44:19","modified_gmt":"2026-09-21T08:44:19","slug":"reverse-charge-procedure","status":"publish","type":"post","link":"https:\/\/www.accountable.de\/en\/blog\/reverse-charge-procedure\/","title":{"rendered":"What is the Reverse Charge procedure and how does it apply to you?"},"content":{"rendered":"\n

Working with <\/span>international clients<\/span><\/a> can be tricky, depending on where exactly they\u2019re located, whether there\u2019s a tax treaty in place, and what sort of foreign exchange and transfer options you have as a freelancer. Not to mention difficult time zones!<\/span><\/p>\n\n\n\n

Things are much easier if your international clients are still based within the EU. Firstly, your currency remains the same, international payments are easy for your clients, you\u2019re likely to be on the same or a similar time zone, and lastly, you can take advantage of the reverse charge system (\u201cReverse Charge Verfahren\u201d).<\/span><\/p>\n\n\n\n

The reverse charge procedure helps to simplify purchases and sales with VAT within the EU, by regulating the transfer of sales tax between sellers and customers who are based in different EU countries. This article explains all you need to know about reverse charge.<\/span><\/p>\n\n\n\n

When to apply the Reverse Charge?<\/span><\/h2>\n\n\n\n
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The purpose of the reverse charge rule is to simplify free trade within the EU, and it’s been in place for almost 20 years.<\/p>\n<\/div>\n<\/div>\n\n\n\n

As a freelancer in Germany, you are permitted to service a client in another EU country. If that EU country is also subject to VAT, the reverse charge rule applies. It stipulates that it\u2019s the buyer \u2013 your client \u2013 who is obliged to pay VAT on the goods or services received, and not you. Therefore, you don\u2019t need to charge VAT on your <\/span>invoices<\/span><\/a> to those clients. <\/span><\/p>\n\n\n\n

The reverse charge rule, however, does not apply when your customer is a private person. A private person pays VAT on the sale of goods or services that you provide. If you’re a Kleinunternehmer<\/a>, the reverse charge rule still applies when you provide services to a VAT-registered business in another EU country. In this case, you issue an invoice without VAT and reference the reverse charge procedure \u2014 just as any other freelancer would. Your EU client then accounts for the VAT in their own country. What the Kleinunternehmer status changes is only that you don’t charge VAT on domestic sales in Germany \u2014 it does not exempt you from the reverse charge obligation on intra-EU B2B service transactions.<\/p>\n\n\n\n

Consider these examples of how reverse charge works in practice:<\/b><\/p>\n\n\n\n