Reverse-charged VAT for construction subcontractors in the Netherlands

Subcontractors in Dutch construction usually invoice without VAT: the VAT is "reverse charged" to the main contractor. It is a mandatory scheme, and it works differently from the reverse charge for foreign clients. Here is how to invoice and report it correctly.

How the scheme works

Instead of you charging and paying VAT, your business customer reports the VAT in their own return (and usually deducts it again immediately). The scheme is mandatory for subcontracting and for hiring out staff in the construction sector: you do part of a job for a contractor who delivers the work on to their client.

It does not apply when you work directly for the end customer. Renovating a private homeowner's bathroom yourself? Then you charge VAT as usual. When in doubt, check with your client or the Belastingdienst.

What goes on the invoice

Two things change compared to a normal invoice:

• no VAT amount, but the wording "btw verlegd" (VAT reverse charged);
• your customer's VAT number is mandatory on the invoice.

All other invoice requirements still apply.

In your VAT return

You report the reverse-charged turnover in box 1e of the Dutch VAT return, without a VAT amount. Your customer reports and usually deducts the VAT in their own return. See the guide on filing your Dutch VAT return.

Do not confuse this with the reverse charge for business clients in other EU countries: that turnover goes in box 3b and requires an extra ICP declaration. That variant is covered in the guide on reverse charging VAT for foreign clients.

How Finq handles it

Pick the VAT type "VAT reverse charged" on the invoice. Finq leaves out the VAT amount, prints the reverse charge wording and warns you if your client's VAT number is missing. The VAT return helper puts the turnover in the right box automatically: 1e for a Dutch customer, 3b for an EU business client, based on the client's country. More on the construction page.

General information, not personal tax advice.