Reverse Charge for Construction Services : Netvisor

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

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

Select the tax processing as Domestic construction service tax processing. A suitable tax text can also be selected behind the customer. Default selections can be overridden on the invoice if desired.

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

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. 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.

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

It is recommended to 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%.

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.

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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