It's 8:19 am. Our fictitious agency boss Anna M. is sitting in her Berlin office, a fresh cup of coffee steaming on her desk. Together with her team of six, she and her agency are known far beyond the country's borders for their haptically and visually appealing print products: The Berliners create and produce posters, business cards, brochures, flyers and much more for their international clients.
Spread out in front of her: the final prints, which are to be used for an art festival in Spain. The special paper used for this, which is appreciated by the customer for its special feel, was specially supplied by a Polish company.
Without the reverse charge procedure, Anna would now have to deal with the Spanish tax office, while the Polish paper supplier would have to deal with the German authorities.
Limitless, but cumbersome - or not?
The endless possibilities that our globalized world brings with it are now an integral part of everyday working life. Sales markets are no longer limited. Anyone can work, trade and do business with anyone. The only downside is the bureaucratic effort involved. Anyone who works with partners and customers from abroad inevitably has to deal with this more brittle side of the coin.
Tax aspects in particular often cause headaches when collaborating across national borders. If the partner company has different tax legislation to you, in theory this means a lot of extra work for companies and their tax advisors.
Less effort thanks to reverse charge
In order to avoid additional work in practice, the reverse charge procedure can be used. This means that if services are provided abroad, the VAT is not owed by the contractor, but by the customers themselves. If they are entitled to do so, they can then claim this VAT directly as input tax.
This does not result in an economic difference, but a considerable difference in terms of effort. Customers and partners abroad do not have to deal with the German tax office, domestic companies do not have to deal with foreign tax offices - this saves a lot of correspondence, administrative work and therefore time and money.
What requirements must be met for companies to be able to use the reverse charge procedure?
- The service provided must be listed in Section 13b UStG
- The services must be provided to an entrepreneur or a legal entity
- For its part, the supplying company may not show any separate VAT
- The company providing the service must indicate on the invoice that the tax liability is reversed to the recipient of the service
Even less effort - thanks to nexnet
Anyone who gets gray hair when it comes to financial management should think about outsourcing this area. The Berlin-based company nexnet has stood for successful business process outsourcing for more than 20 years - for billing, financial or accounts receivable management and much more. The Berlin-based company also provides comprehensive advice on process changes relating to the reverse charge procedure and will also make the necessary adjustments if required, so you can sit back and relax.
In turn, tax-free and non-taxable transactions are not subject to the reverse charge procedure.
Quality despite quantity
With the ever-increasing number of transactions, invoices and customer data, it is important to have a consistently high-quality partner at your side. nexnet GmbH meets high quality standards thanks to annual internal and external audits and complies with DIN ISO 9001:2015 - the most common and important international standard in quality management. Find out now about nexnet's wide-ranging services and benefit from its many years of experience in e-commerce and the telecommunications industry.
