The Reverse Charge Mechanism: What You Need to Know

If you work in tax or accounting, you’re probably familiar with the reverse charge mechanism. It’s a process in which the consumption tax is declared and paid to the government by the buyer, rather than the seller. This is particularly relevant for value-added tax (VAT) or goods and services tax (GST) on cross-border business-to-business (B2B) transactions.

While the basics of the reverse charge are well-known, there are several lesser-known rules and applications that could surprise you. In this article, we’ll cover some of the lesser-known aspects of the reverse charge mechanism and provide practical examples to help you understand how it works.

• Basics of the Reverse Charge Mechanism
• Lesser-Known Aspects of the Reverse Charge Mechanism
  • Reverse charge without declaration
  • Reverse charge with payment
  • Common AP mistakes caused by the Reverse Charge
  • Reverse Charge on Services to Unregistered Businesses in the EU
  • Mandatory EU Invoice Wording
• Conclusion
• How can Fonoa help?

Source: www.fonoa.com

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