Applying reverse-charge on invoices

Selling to businesses in other countries? Quaderno will automatically apply reverse-charge on your B2B invoices when applicable and where available.

What is reverse-charge?

Reverse-charge means the responsibility of VAT/GST reporting for the sale moves from the seller to the buyer. The seller does not apply VAT/GST on the invoice if the reverse-charge mechanism can be used.
Keep in mind that reverse-charge is only applicable on B2B sales to other countries, not your own country.
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Want to learn more? Check out our blog article on reverse-charge.

Automatically applying reverse-charge on your invoices

The good news is that if you’re using one of our integrations, Quaderno can take care of this automatically. Quaderno determines B2B transactions by the customer's tax ID. It will automatically add the “reverse-charge” note on invoices to make them compliant, where applicable.
 
Quaderno can automatically verify these Tax IDs:
 
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When one of these numbers is provided, Quaderno automatically checks the validity of the tax ID with the respective tax authority. If reverse-charge applies, this will be displayed on the invoice.
 
How it works with Quaderno integrations:
2. Quaderno automatically verifies the tax ID with the respective tax authority.
3. The tax ID and reverse-charge note will automatically appear on the final invoice.

Manually applying reverse-charge on your invoice

There could be a number of situations when you may need to add a business number and apply reverse-charge a posteriori, as well as when creating a manual invoice.
 
Just follow these steps for non-final invoices:
1. Open the invoice from the invoices page.
2. Select Edit and add the customer's tax ID in the Tax ID field.
3. Select none in the tax fields for the line items on the invoice
4. Go to Need to add more details? and add the note Tax Reverse charged.
 
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When manually adding the required "Tax reverse charged" note on invoices, remember that it only applies to B2B sales to other countries (not yours). It's also a good idea to validate the Tax ID on one of the above official country links.

Reviewing a customer's tax ID

You’ll see the tax ID status in the contact’s file:
  • Verified: The tax ID has been verified via one of the databases listed above.
  • Unavailable: For technical reasons, the databases listed above were not available when Quaderno tried to verify the tax ID. For customers outside the countries/provinces listed above, tax IDs will always have this status.
  • Unverified: If Quaderno tried to verify the tax ID and it was invalid, it would appear as unverified.

FAQs

What happens if the customer's tax ID isn't valid?
By default VAT/GST will be calculated for the charge. If you think this could be a mistake, first check the validity of the business number (search for the number on the links above!) or contact us and we’d be happy to help
Will reverse-charge apply on B2B sales to customers in my own country?
No, Quaderno will not apply reverse-charge on B2B sales to customers in your own country.
What happens if I make B2B sales to customers in countries or regions where Quaderno doesn't validate tax IDs?
In these cases, reverse-charge would not automatically apply on the invoice. While we are expanding the list of countries/regions where Quaderno can verify tax IDs, unfortunately not every country has a database with this information that can be accessed by third-parties.

Troubleshooting

My customer's VAT number appears as unverified, but it is a valid VAT number.
As we use the official VIES system to verify VAT numbers, there can be times when VIES is down or has scheduled maintenance. If your customer made a purchase when VIES was down, unfortunately Quaderno wouldn't be able to automatically verify the VAT number. When they make their next purchase or the subscription renews, we automatically try to verify the VAT number again.