Subcontracting is an important case
The reverse-charge mechanism often applies to physical work on immovable property carried out as a subcontractor. For example, you may be working for a main contractor. If you work directly for a private homeowner, this subcontracting mechanism does not apply simply because the work is construction.
Not all work follows the same rules
Design work falls outside this reverse-charge mechanism. Exceptions also apply if you do more than half the work in your own workshop, or if the work is incidental to goods you have sold. A foreign party or a particular role of the customer can bring other rules into play.
What changes on the invoice?
- Do not charge a VAT amount for the work subject to reverse charge.
- Include the Dutch wording “btw verlegd” (VAT reverse charge).
- Include your customer’s VAT identification number.
- State the consideration separately for each VAT rate that would apply without reverse charge.
- Continue to complete all other invoice details carefully.
Keep the treatment clear in your records
When you reverse-charge VAT to a Dutch customer, report the relevant turnover in section 1e of the Belgian VAT return. If VAT has been reverse-charged to you, you must declare it yourself; deduction depends on your entitlement to recover input VAT. Ask your accountant to check that the treatment matches your situation.
Check before you send
A customer asking for an invoice “without VAT” is not enough. Check the work, your customer’s role and their VAT identification number. If you’re unsure, ask your accountant for the correct treatment before sending the invoice.