Reverse Charge Procedure for the Import of Electronic Services

What is Reverse-Charge?

Reverse charge is a mechanism in which the obligation to pay value-added tax (VAT / Umsatzsteuer) is shifted from the supplier to the recipient, provided that the recipient is a business or another taxable person in Germany.

When does it apply to imported electronic services?

If you run a business in Germany (Gewerbe / self-employed / freelancer) and you purchase digital services from a foreign company (for example from Google, Meta, OpenAI, Fiverr, Canva, Upwork, etc.), the transaction is generally subject to the reverse-charge mechanism under § 13b UStG (German VAT Act).

Examples of covered electronic services:

Service

  Examples of providers

Online advertising

  Google Ads, Facebook Ads

SaaS tools

  Canva, Notion, ChatGPT Pro

Design or translation services

  Fiverr, Upwork

Web hosting

  Bluehost, GoDaddy

Software and subscriptions

  Adobe, Spotify Business

What do you have to do as the customer in Germany?

• Ask the foreign supplier to issue an invoice without VAT (ohne MwSt).

• The invoice must contain the following note:
  “Reverse-Charge – § 13b UStG”

• Enter the net amount (ohne USt) in your monthly or quarterly VAT return (USt-VA) as follows:

USt-VA code

  What do you enter?

46

  Net value of the service as the taxable amount

67

  The same amount as input VAT (Vorsteuer) you can deduct (if you are entitled to input VAT deduction)

Result:

You do not actually pay anything in economic terms (VAT due – input VAT = zero) – but you must report the transaction accurately and completely.

Important requirements:

Requirement

  Details

You have a VAT ID number (USt-IdNr., EU VAT number)

  Required to purchase from companies outside Germany without VAT being charged on the invoice

You keep every electronic invoice from the supplier

  For the legally required retention period

You are registered for VAT (not a Kleinunternehmer)

  The Kleinunternehmer scheme does not formally fall under the reverse-charge mechanism

Important notes:

• If you are a Kleinunternehmer (according to § 19 UStG), you are not subject to normal VAT in Germany, but you may still have to submit a “Zusammenfassende Meldung” (recapitulative statement, ZM) when you import services.

• Failing to apply the reverse-charge mechanism correctly can lead to fines and subsequent tax assessments (Nachzahlung).

Editorial notice:

The authors and editorial team of this website strive to provide accurate information through extensive research and consultation of multiple sources when preparing articles. Nevertheless, errors may occur or certain details may remain uncertain. Therefore, please treat the information in the articles as an initial reference only and always contact the competent authorities or professionals to obtain binding and up-to-date information.