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.

This means that no tax rate will be applied, because the responsibility of VAT/GST reporting for the sale moves from the seller to the buyer.

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:

When one of these numbers is provided (manually or by your integration), Quaderno automatically checks the validity of the tax ID with the respective tax authority.

If reverse charge applies, it will be displayed on the invoice.

🔎  Want to learn more about the reverse charge mechanism? Check out our blog article!

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 afterwards, as well as when creating a manual invoice.

For non-final invoices (those not sent to the customer or created automaticallly), you can just click Edit from the menu, go to Need to add more details? , and add a note like "Tax Reverse charged " .

For final invoices, already made available to the customer:

  1. Add the customer's tax ID in the Tax ID field of the contact.
  2. Open the invoice from the invoices page.
  3. Issue a credit note for the full amount.
  4. Create a new invoice.
  5. Select none in the tax fields for the line items on the invoice.
  6. Go to Need to add more details? and add a note like "Tax Reverse charged ".

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.

Common questions

What happens if the customer's tax ID isn't valid?

The corresponding tax will be calculated for the charge. If you think this could be a mistake, first check the validity of the business number by searching for the number on the links above.

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 will not be automatically applied to the invoice. Unfortunately not every country has a database with this information accesible to third-parties.

Why does my customer's VAT number appear as unavailable if it is a valid VAT number?

We use the official VIES system to verify VAT numbers. There can be times when VIES is down or has scheduled maintenance. We publish most of the scheduled maintenances into our status page.

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 their subscription renews, we automatically try to verify the VAT number again.

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