This guide covers how to handle the customer's default tax processing for the reverse charge mechanism in construction services and ensure that the tax processing is correct on the sales invoice.

Note! An invoice can only have one type of tax processing at a time. If part of the sales is subject to the reverse charge mechanism and part is not, separate invoices must be made for each.

Settings behind the customer

You can open the customer's Edit Additional Information tab by selecting Sales > Customers > Customer register > select customer > Edit Additional Information.

The customer's default tax processing is set on the Edit Additional Information tab.

  • Select the tax processing as Domestic construction service tax processing.
  • Select a suitable tax text behind the customer.
  • If necessary, override the default selections on the invoice.

 


To ensure the Finvoice e-invoice message generates the tax code AE, the EU standard-compliant e-invoice option must be checked, and the correct e-invoice address and operator must be added behind the customer. 


Creating the invoice

You can create a new invoice for the customer by selecting Sales > Sales invoices > New sales invoice > select customer.

When a new invoice is created for the customer, the default selection is Domestic construction service tax processing and the selected tax text. The processing can be changed if necessary.

  • First select the correct tax processing for the invoice.
  • Only after that enter the line section of the invoice.

Note! The tax processing should be selected correctly first and only then fill in the line item of the invoice. 

 

Fill in the invoice normally, the system will automatically zero out the vat entries.

Keywords: Tax processing, Domestic construction service tax processing

Creating a new product for reverse VAT sales invoicing in construction services

If you want to track reverse VAT sales in construction services separately, it is recommended to create a separate sales account and product for this purpose. This ensures that sales are automatically directed to the correct accounting account and the correct section of the tax return.

You can create a new sales account by selecting Bookkeeping > Specification of accounts > New account.

1. Create a new sales account (e.g., Sales of construction services VAT 8c§)

  • Track sales of construction services in their own account (e.g., in the revenue account group).
  • Set the default vat rate for the sales account as: RAMY – Sales of construction services.
  • Effect: The RAMY identifier does not make entries to VAT receivable or payable accounts. It automatically directs the sales amount to the periodic tax return section "319 Sales of construction services". The system always records the tax rate as 0%.

You can create a new product by selecting Products > Product register > New product.

2. Create a new product

You can create a product in Netvisor (e.g., "Construction service (reverse VAT)"), for which you set the default sales account as the account you created earlier.

  • When you use this product on the invoice, Netvisor automatically handles the taxation correctly without you having to remember to select tax codes separately for each invoice row.


Frequently asked questions

Question: How do I set Domestic construction service tax processing as the default for a customer?

Answer: Open the customer's Edit Additional Information tab, select Domestic construction service tax processing as the tax processing and, if necessary, select a suitable tax text behind the customer.

Question: Why must sales subject to the reverse charge mechanism be invoiced on separate invoices?

Answer: An invoice can only have one type of tax processing at a time, so sales subject to the reverse charge mechanism and sales outside its scope must be invoiced on separate invoices.

Question: How do I ensure that the tax code AE is generated on the Finvoice e-invoice?

Answer: Check the EU standard-compliant e-invoice option and add the correct e-invoice address and operator behind the customer.

Question: In which order should I select the tax processing and fill in the invoice lines?

Answer: First select the correct tax processing for the invoice and only after that fill in the line section of the invoice, in which case the system will automatically zero out the vat entries.

Question: Why is it recommended to create a separate sales account and product for sales under the reverse VAT mechanism in construction services?

Answer: A separate sales account and product ensure that sales are automatically directed to the correct accounting account and to the periodic tax return section "319 Sales of construction services", and Netvisor handles the taxation correctly without separate tax code selections on the invoice rows.

Keywords: Tax processing, Domestic construction service tax processing, Finvoice, AE tax code, EU standard-compliant e-invoice, e-invoice address, operator, RAMY – Sales of construction services, 319 Sales of construction services, reverse charge mechanism, sales of construction services, sales account, product, Netvisor, sales invoice

This article has been translated using an AI-based translation tool. The contents or wording of these instructions may differ from those in other instructions or in the software.


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