Reverse charge procedure
Under the reverse charge procedure, the liability for VAT is
transferred to the recipient of a supply of goods or services. This
applies, as a rule, if the recipient of the goods or services is a
business; however, in some cases it also applies to recipients
that are (non-business) legal persons.
The scope of the reverse charge procedure includes, in particular,
the following cases:
– Work and materials supplies (Werklieferungen) and services
of foreign businesses. A foreign business is a business that
does not have a business domicile, registered offce, place
of management, or fxed establishment in Germany. When
a business has a fxed establishment in Germany but the
service in question is not rendered from such fxed establish-
ment, the business is treated as a foreign business, and this
service is generally subject to the reverse charge procedure.
– Supplies of objects transferred by way of security outside
– Supplies within the scope of the Real Estate Transfer Tax Act
(Grunderwerbsteuergesetz), if the supplier opts in favor of VAT.
– Construction work if the recipient is a business and sustain-
ably supplies construction work, regardless of the specifc
use of the received construction work. This applies according-
ly to building cleaning services.
– Supplies of gas, cooling energy, and heat through respective
networks, and electricity by a foreign business to another
business whose main activity is to sell the goods and own
consumption of the goods is of minor signifcance.
– Supplies of gas through the natural gas network and of
electricity by a business established in Germany to another
business which also performs services of this kind.
– Transfer of greenhouse gas emission rights according to the
Greenhouse Gas Emission Trade Law.
– Supply of certain gold, scrap, and waste materials.
– Supplies of mobile phones, tablet computers, game consoles,
and integrated circuits (in a state prior to their integration into
end-user products) if the total amount invoiced in the context
of an economic transaction is at least € 5,000.
No account is taken of any subsequently reduced consideration. This applies
accordingly to supplies of certain precious metals, base met-
als, selenium, and Cermet.