Supplies of reverse charge services (general rule)

By Tolley
Supplies of reverse charge services (general rule)

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Supplies of reverse charge services (general rule)
  • What are general rule services?
  • Exceptions
  • VAT treatment of reverse charge services
  • Practical considerations

This guidance note deals with the VAT treatment of services that come within the scope of the reverse charge mechanism within the EU. Most services are treated as reverse charge or ‘general rule’ services if they are supplied to relevant business customers located in another EU member state. However, there are exceptions to this general rule and the exceptions are summarised below and are covered in a number of different guidance notes linked to this document. This guidance note should be read in conjunction with the Where is the place of supply of services? guidance note in order to determine the correct place of supply and VAT treatment.

VATREVCHG10000; VATPOSS06000; VATA 1994, s 8; 2006/112/EC, Articles 43–59 ; 2011/282/EU ; De Voil Indirect Tax Service V3.182, V7.269; VAT (Place of Supply of Services) (Amendment) Order, SI 1995/3038; VAT Notice 741A 

Please note that the services listed below are also outside the scope of UK VAT when supplied to any person (business and private) who is established outside of the EU.

VATA 1994, Sch 4A, Part 3, para 16
What are general rule services?

Most services are treated as general rule (reverse charge) services and if the services are supplied to a relevant business person, the customer is required to account for any VAT due on the services, provided they are located in a different EU member state from the supplier. Supplies made to private and non-business customers are liable to VAT in the supplier’s member state. All services that are not included in one of the exceptions explained below are treated as reverse charge services within the EU.

The most common types of reverse charge services are explained below. However, it is important to note that since 2010, business

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