Germany Reverse Charge VAT (§13b UStG) Explained

If you invoice German clients — or issue invoices from Germany — you have probably heard that sometimes you must not charge the usual 19% VAT. That is the reverse charge procedure under §13b UStG (Umsatzsteuergesetz, the German VAT Act). Getting it wrong is one of the most common and expensive invoicing mistakes freelancers and small businesses make, so this guide walks through it in plain English, as of 2026.

Germany's standard VAT rate is 19%, with a reduced rate of 7% for items like food, books, and local passenger transport (§12 UStG). Under the reverse charge, neither rate appears on the invoice — the VAT liability simply moves from the supplier to the recipient. If you want to see how the numbers work on a specific invoice, try our German reverse charge VAT calculator, which computes the recipient's VAT position from any net amount.

What the reverse charge is

Normally, a German supplier adds 19% (or 7%) VAT to the invoice, collects it from the customer, and pays it to the tax office (Finanzamt). Under the reverse charge, the process flips: the supplier issues a net invoice with no VAT, and the customer becomes the person who owes the VAT. The customer declares it in their advance VAT return (Umsatzsteuervoranmeldung) and — if entitled to input VAT deduction (Vorsteuerabzug) — claims it back in the same return, so the net effect is often zero.

The reverse charge is not a Germany-only idea. It is the German implementation of the EU-wide mechanism under Article 196 of the EU VAT Directive. We cover the broader concept in our guide to reverse charge VAT across the EU; this article focuses on the German rules under §13b UStG.

When you must NOT charge 19% VAT

Reverse charge under §13b applies in a defined set of situations. The most important ones for freelancers and small businesses are:

• Cross-border B2B services within the EU. A German business providing services to a business customer in another EU country (e.g. a designer in Berlin invoicing an agency in France) invoices net — the service is taxed where the customer is established.
• Intra-EU supplies of goods (§6a UStG). Goods delivered to a business customer in another EU member state are zero-rated by the supplier; the customer declares an intra-Community acquisition.
• Construction services between businesses. A subcontractor doing construction work for another construction business in Germany must invoice net under §13b Abs. 1 Nr. 4 UStG. This deliberate rule fights VAT fraud in the construction sector.
• Building cleaning services supplied to another business that itself provides cleaning services.
• Scrap metal, waste, and certain raw materials delivered between businesses.
• Mobile phones, tablets, game consoles, and computer chips above €5,000 per invoice, supplied to another business.
• Electricity and gas supplied to resellers whose main business is reselling energy.

The pattern: the reverse charge targets B2B transactions in fraud-prone sectors or cross-border trade. Sales to private consumers (B2C) almost never fall under it — you charge 19% as usual.

The mandatory invoice wording

A reverse charge invoice must show no VAT amount and no VAT rate. Instead, it must carry the specific note prescribed by §14a Abs. 5 UStG:

"Steuerschuldnerschaft des Leistungsempfängers"

That roughly means "the recipient is liable for the tax." On cross-border invoices, adding the English phrase "Reverse charge" is also accepted practice, and many businesses include both. Beyond the note, the invoice must still contain the customer's VAT identification number (USt-IdNr.) and all standard §14 UStG details: names and addresses of both parties, a sequential invoice number, the invoice date, the date or period of supply, and the net amounts.

Before invoicing net to another EU business, always verify their VAT number — an invalid USt-IdNr. can invalidate the whole treatment. See our guide on how to verify an EU VAT number with VIES.

What the recipient must do

Receiving a reverse charge invoice does not mean "no VAT involved." It means you handle it. As the recipient you must:

1. Calculate the VAT yourself — usually 19% of the net amount.
2. Declare it as output VAT in your advance VAT return (Umsatzsteuervoranmeldung) for the relevant period.
3. Claim it as input VAT (Vorsteuer) in the same return, if you are entitled to deduction. The two amounts cancel out, so you pay nothing extra — but both entries must appear.
4. Report cross-border cases in the recapitulative statement (Zusammenfassende Meldung, ZM) where required.

If you are not entitled to input VAT deduction (e.g. a Kleinunternehmer under §19 UStG), the VAT you declare under reverse charge is a real cost — you cannot get it back.

Common errors to avoid

• Charging 19% to an EU business customer by mistake. The classic error: a German freelancer invoices a French company and adds 19% "to be safe." The French customer cannot use that VAT as input tax. Cross-border B2B services are generally reverse-charged — verify the customer's VAT number and invoice net.
• Missing invoice wording. Without "Steuerschuldnerschaft des Leistungsempfängers," the invoice is formally deficient. VAT wrongly shown can also trigger §14c UStG liability — you may owe the VAT simply because you stated it.
• Forgetting to declare received reverse charge supplies. If you received a net invoice as a German business, the liability sits with you. Missing the declaration leads to back payments and late-filing penalties.
• Assuming reverse charge applies to consumers. Private customers always get charged 19% (or 7%). There is no reverse charge in B2C.
• Missing the €5,000 threshold. For mobile devices and chips, reverse charge only kicks in above €5,000 per invoice — below that, charge 19% normally.

Worked example: a €1,000 net invoice

A Berlin-based web designer invoices a business client in Amsterdam €1,000 for design services. The client provided a valid Dutch VAT number, so reverse charge applies.

The invoice shows: net €1,000.00, no VAT rate or amount, the note "Steuerschuldnerschaft des Leistungsempfängers / Reverse charge," both parties' VAT numbers, and a total of €1,000.00.

The Dutch client self-assesses Dutch VAT on the €1,000, declares it in their Dutch VAT return, and reclaims it as input VAT in the same return — net effect zero for a fully taxable business.

The German designer reports the supply in their German VAT return and in the recapitulative statement (ZM).

Want to run your own numbers? Our German reverse charge VAT calculator takes any net invoice amount and shows the recipient's VAT liability and deductible input VAT side by side.

FAQ

Do I need the customer's VAT number on a reverse charge invoice?

Yes. For cross-border reverse charge invoices, the customer's valid EU VAT identification number must appear on the invoice — verify it via VIES before invoicing net. For domestic German §13b cases (e.g. construction), the recipient must be an entrepreneur; document their status.

What happens if I forget the "Steuerschuldnerschaft des Leistungsempfängers" note?

The invoice is formally incomplete, and wrongly shown VAT can create liability under §14c UStG — you may owe the VAT simply because you stated it. Issue a corrected invoice if you spot the error.

Can I use reverse charge for private customers?

No. Reverse charge under §13b UStG is B2B only. Supplies to private consumers always carry the regular 19% (or 7%) VAT.

Does the reverse charge apply to Kleinunternehmer (§19 UStG)?

A Kleinunternehmer charges no VAT at all, so there is nothing to reverse-charge on their own invoices. But if a Kleinunternehmer receives reverse charge supplies, they must still declare and pay the VAT — without being able to deduct it.

Is reverse charge the same as a VAT exemption?

No. An exemption (§4 UStG) means no VAT is owed by anyone. Under the reverse charge, VAT is owed — by the recipient instead of the supplier. Declaring nothing is the mistake that causes tax office trouble.

Last updated: September 2026

This article is for information only and is not professional tax advice.