How reverse charge VAT works in Germany
Under the reverse charge mechanism, the liability to pay VAT shifts from the supplier to the customer. The supplier issues a net invoice with 0% VAT and the recipient self-accounts for the tax — reporting it as output VAT and, where entitled, reclaiming it as input VAT in the same return. Germany applies this to intra-EU B2B supplies of goods and services (Article 196 of the EU VAT Directive) and to a list of domestic cases in §13b UStG, including construction services supplied to construction businesses, supplies of gas and electricity, scrap metal, and building cleaning.
A correct reverse charge invoice shows no VAT amount and no VAT rate. Instead it must carry the mandatory note “Steuerschuldnerschaft des Leistungsempfängers” — the exact wording prescribed by §14a para. 5 sentence 1 UStG. On cross-border invoices the English phrase “Reverse charge” is also accepted. Germany's standard VAT rate is 19% and the reduced rate is 7%; the recipient uses the rate that would normally apply to self-account the tax.
Note that a missing invoice note does not change the liability: the reversal of the tax debt is a matter of law, not of the invoice text — but a formally deficient invoice can still cause problems in a tax audit. For intra-EU transactions, always verify the customer's VAT identification number (USt-IdNr.) and keep proof of the intra-Community supply.
Frequently asked questions
When does §13b UStG reverse charge apply?
For intra-EU B2B supplies of goods and services, and domestically for construction services to construction businesses, gas/electricity supplies, scrap and waste materials, building cleaning, emission certificates, and supplies of mobile phones or integrated circuits above €5,000 per transaction, among others.
What must be on a reverse charge invoice?
All standard invoice details, the customer's VAT ID for intra-EU supplies, no VAT amount or rate, and the mandatory note “Steuerschuldnerschaft des Leistungsempfängers” (§14a Abs. 5 UStG) — or “Reverse charge” on cross-border invoices.
Does 0% VAT mean the supply is VAT-free?
No. Reverse charge is not an exemption — the tax is still due, but the recipient accounts for it instead of the supplier. The recipient typically reports 19% output VAT and reclaims 19% input VAT, netting to zero.
Do I need the customer's German VAT ID?
For intra-EU supplies you must state the customer's valid EU VAT identification number (USt-IdNr.) on the invoice and verify it. For domestic §13b cases (e.g. construction), confirm the customer is a business subject to the rule.