Reverse charge means that the condition of taxpayer is placed on the one who buys the good or receives the service instead of the service provider or product seller. Below we will see what it implies and under what conditions it applies.

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Reverse charge

VAT taxpayers are usually natural or legal persons who make deliveries of goods or services subject to Value Added Tax.

However, in certain circumstances, the so-called reverse charge can occur, which means that the taxpayer is the buyer of the good or the one who receives a service.

The circumstances in which reverse charge can occur are the following:

• When those who perform the operation are people or companies not established in the territory of application of the Tax. It occurs, for example, when a state company invoices a company from the Canary Islands, Ceuta or Melilla.
• When the operation is a delivery of gold of law or semi-finished products of this metal (equal to or greater than 325 thousandths).
• When it comes to operations in which services are provided that have as their object emission rights, certified emission reductions and greenhouse gas emission reduction units.
• When the operation is a delivery of waste and scraps from industry. And in general the operations of delivery of materials defined in the Annex of the VAT Law.

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We hope this information is very useful to you.