Reversal of tax liability (Germany)
The reversal of tax liability ( tight. : Reverse charge , dt also reverse charge.) Is a special provision in the VAT law , after not performing entrepreneur, but the recipient has to pay the tax.
principle
According to currently applicable sales tax law, the service provider must pay sales tax to the tax office. The recipient of the service can claim the sales tax paid as input tax, provided that he is an entrepreneur and the other requirements for input tax deduction are met. When reversing the tax liability, however, the tax liability is transferred to the recipient of the service for certain services. This leads to a simplification of the tax procedure for the tax authorities as well as for the service provider and serves to combat tax reduction in the area of sales tax (tax fraud). But the service recipient also has advantages, as he does not have to pre-finance the sales tax paid to the service provider until it is reimbursed by the tax authorities.
requirements
The reversal of the tax liability is regulated in § 13b UStG . Accordingly, for certain services, the tax liability is transferred to the recipient of the service, provided that he is an entrepreneur within the meaning of the sales tax law ( reversal of tax liability ).
It applies to the following services to entrepreneurs:
- Deliveries of works in Germany to an entrepreneur based abroad ( Section 13b (2) No. 1 1st alternative UStG),
- Other services provided by an entrepreneur based abroad ( Section 13b (2) No. 1 2nd alternative UStG) if the services are taxable in Germany. The foreign entrepreneur has to use his sales tax identification number .
- Deliveries of items assigned by way of security outside of the insolvency proceedings ( Section 13b (2) No. 2 UStG)
- Sales that fall under the Land Transfer Tax Act ( Section 13b (2) No. 3 UStG)
- Delivery of gas via the natural gas network or of electricity by entrepreneurs based abroad ( Section 13b (2) No. 5a UStG)
- Delivery of gas via the natural gas network or of electricity to entrepreneurs who are resellers ( Section 13b (2) No. 5b UStG)
- Transfer of emission rights ( Section 13b (2) No. 6 UStG)
- Delivery of scrap metal and scrap within the meaning of Appendix 3 to Section 13b of the UStG ( Section 13b, Paragraph 2, No. 7 of the UStG)
- Delivery of gold (in specified qualities) ( Section 13b (2) No. 9 UStG)
- Deliveries of mobile phones, tablet computers and game consoles as well as integrated circuits before installation in an object suitable for delivery at the retail level, if the value within an economic transaction is at least 5,000 euros ( Section 13b (2) No. 10 UStG)
- Delivery of precious, base metals and semi-finished metal products in accordance with Appendix 4 of the Sales Tax Act, if the value within an economic transaction is at least 5,000 euros. ( § 13b Abs. 2 Nr. 11 UStG).
as well as for the services of sub-contractors
- Construction work if the recipient of the service himself provides sustainable construction work ( Section 13b (2) No. 4 UStG)
- Construction services are explicitly: deliveries of works and other services that serve the production, repair, maintenance, modification or removal of structures, with the exception of planning and monitoring services.
- Cleaning of buildings and parts of buildings if the recipient of the service provides such services himself ( Section 13b (2) No. 8 UStG)
In these cases, the supplier may not show any sales tax in his invoice; Instead, the recipient of the service must register the sales tax with the tax office responsible for him. If the recipient of the service is entitled to deduct input tax, he can claim input tax in the amount of the tax liability that has been transferred to him.
Effects
In the reverse charge procedure, the obligation to pay sales tax in business transactions between companies is shifted to the recipient of the service. This can prevent so-called carousel fraud . If the recipient of the service is an entrepreneur, he himself owes the sales tax for his purchases according to the reverse charge procedure, but is at the same time entitled to the same amount of input tax deduction. The advantage of this system is that considerable amounts of input tax are no longer paid out by the tax office, but only offset.
The result is similar to the intra-community acquisition . However, this is not preceded by any of the above-mentioned services , but an intra-community delivery that is VAT-free. The entrepreneur receiving the service must pay tax on an intra-Community acquisition in the country of destination. However, the procedure is completely different from the reverse charge procedure.
With reverse charge, there is a risk that the fraud will shift to the retail level. Therefore, it requires extensive reporting obligations for companies, which, according to the EU Commission, can increase administrative costs by around 40 percent.
development
The reverse charge procedure has so far been used by some other European countries in connection with intra-community work services and work deliveries by relocating the place of performance to avoid the input tax refund procedure. The of z. B. Germany and Austria intended expansion of the procedure was blocked by the European Commission. In July 2012, the Commission then proposed the introduction of a "Quick Reaction Mechanism", which should enable member states to introduce the reverse charge procedure for certain products or services for a limited period within one month if significant sales tax fraud is discovered. The necessary amendment to the VAT Directive was made by the Council of the European Union on July 22, 2013 with Directives 2013/42 / EU and 2013/43 / EU.
Individual evidence
- ↑ Wolff von Rechenberg: Reverse Charge: Reversal of tax liability for invoices from abroad. September 9, 2019, accessed on January 30, 2020 (German).
- ↑ This is how the VAT mafia embezzles billions . Andre Tauber, Martin Greve, Welt Online , April 7, 2016.
- ↑ http://ec.europa.eu/taxation_customs/taxation/vat/key_documents/legislation_recently_adopted/index_de.htm
