VAT
Reverse Charge in Practice: The Reverse Charge Mechanism Explained Simply
· 3 min read
Construction work, cross-border trade, and selected commodities. When you do not pay VAT yourself, but your customer does instead, and how to issue such an invoice correctly.
Domestic reverse charge mechanism
This applies primarily to construction and assembly work between VAT payers. You do not state the tax amount on the invoice, but include a mandatory statement that the customer will pay the tax.
Cross-border services within the EU
When providing a service to a VAT payer from another EU Member State, the place of supply shifts to the customer. You report this supply on your VAT return as well as in the EC Sales List (souhrnné hlášení).
Most common mistake: unverified VAT ID
Without verifying the customer's VAT ID (DIČ) in the VIES system, you risk an additional tax assessment. Verification must be carried out for every document and the confirmation should be archived.
Author: FinTaxo expert team
Operated by: Zaklipso s.r.o.
Czech original: read this article in Czech
This article is general information and does not replace individual tax, accounting or legal advice. Czech legislation changes frequently — verify the current wording or discuss your situation with us before acting on it.
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