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  3. Law: Taxation & Customs

verlegd (btw)

English translation: reverse charge

GLOSSARY ENTRY (DERIVED FROM QUESTION BELOW)
Dutch term or phrase:verleggen (btw)
English translation:reverse charge
Entered by: Kitty Brussaard

17:33 Dec 11, 2013
    The asker opted for community grading. The question was closed on 2013-12-14 18:54:10 based on peer agreement (or, if there were too few peer comments, asker preference.)


Dutch to English translations [PRO]
Bus/Financial - Law: Taxation & Customs
Dutch term or phrase: verlegd (btw)
'Indien de opdrachtgever dit verzoekt dient de aannemer op zijn declaratie te vermelden dat de omzetbelasting wordt verlegd...'

I understand what this means, that an intermediary doesn't receive or pay VAT, but is there an English (UK) term for this?

Thanks!
Richard Purdom
Portugal
Local time: 06:27
reverse charge
Explanation:
See f.i. http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14100.ht...

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Note added at 51 min (2013-12-11 18:24:30 GMT)
--------------------------------------------------

The reverse charge provisions are a simplification measure to avoid the need for suppliers to register in a Member State where they supply their services. Normally, it is the supplier of a service who must account to the tax authorities for any VAT due on their supplies. However, for certain services, where the recipient belongs in an EC Member State and the supplier belongs in another country, the position is reversed and it is the customer who must account for any VAT due. This procedure is referred to in this manual as ‘reverse charge’ but it is also referred to by some people as ‘tax shift’.
http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14100.ht...

--------------------------------------------------
Note added at 56 min (2013-12-11 18:29:48 GMT)
--------------------------------------------------

This also seems to apply to your specific context (i.e. VAT being accounted for by the principal contractor instead of the subcontractor).
See http://www.revenue.ie/en/tax/vat/property/reverse-charge.pdf

--------------------------------------------------
Note added at 15 uren (2013-12-12 09:17:52 GMT)
--------------------------------------------------

Both links provided above clearly show that the HMRC department refers to this mechanism as 'reverse charge (VAT)'. With regard to reverse charge VAT in the construction industry (see second link), the department provides the following instructions:

If you are a subcontractor:
• You will no longer charge VAT to the principal.
• You should issue an invoice* to the principal, which includes your VAT registered number but does not include the VAT rate or VAT amount.
• The invoice will also contain the statement “VAT ON THIS SUPPLY TO
BE ACCOUNTED FOR BY THE PRINCIPAL CONTRACTOR”

--------------------------------------------------
Note added at 15 uren (2013-12-12 09:21:55 GMT)
--------------------------------------------------

And see also http://www.revenue.ie/en/tax/vat/property/faqs-reverse-charg... and http://www.revenue.ie/en/tax/vat/property/vat-rules-contract...

--------------------------------------------------
Note added at 15 uren (2013-12-12 09:23:59 GMT)
--------------------------------------------------

http://www.proz.com/kudoz/dutch_to_english/law:_taxation_cus...

--------------------------------------------------
Note added at 1 dag22 uren (2013-12-13 16:02:14 GMT)
--------------------------------------------------

And see http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/b...
Selected response from:

Kitty Brussaard
Netherlands
Local time: 07:27
Grading comment
Selected automatically based on peer agreement.
4 KudoZ points were awarded for this answer



Summary of answers provided
5 +1shifted
ineke meijer
4 +2reverse charge
Kitty Brussaard


Discussion entries: 18





  

Answers


7 mins   confidence: Answerer confidence 5/5 peer agreement (net): +1
shifted


Explanation:
VAT SHIFTED

--------------------------------------------------
Note added at 41 min (2013-12-11 18:14:32 GMT)
--------------------------------------------------

http://www.vat-assist.nl/customs_topics/VATnetherlands/

ineke meijer
Netherlands
Local time: 07:27
Native speaker of: Dutch
Notes to answerer
Asker: Great proof in the link, thanks!


Peer comments on this answer (and responses from the answerer)
disagree  freekfluweel: Of dat "shifted" heet in het Engels...? (Anders begrijpt writeaway het niet meer) / Niet persoonlijk maar de term kan zo niet in de KOG komen!
1 hr
agree  writeaway: it's the reverse charge mechanism. VAT is shifted. see pg 11: http://www.ey.com/Publication/vwLUAssets/VAT_newsletter_Issu...$FILE/VAT_newsletter_Issue_7_2012.pdf (seems that URL has to be copy/pasted for it to work. clicking here doesn't do it. )
1 hr
agree  David Walker (X)
1 hr
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49 mins   confidence: Answerer confidence 4/5Answerer confidence 4/5 peer agreement (net): +2
verleggen (btw)
reverse charge


Explanation:
See f.i. http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14100.ht...

--------------------------------------------------
Note added at 51 min (2013-12-11 18:24:30 GMT)
--------------------------------------------------

The reverse charge provisions are a simplification measure to avoid the need for suppliers to register in a Member State where they supply their services. Normally, it is the supplier of a service who must account to the tax authorities for any VAT due on their supplies. However, for certain services, where the recipient belongs in an EC Member State and the supplier belongs in another country, the position is reversed and it is the customer who must account for any VAT due. This procedure is referred to in this manual as ‘reverse charge’ but it is also referred to by some people as ‘tax shift’.
http://www.hmrc.gov.uk/manuals/vatpossmanual/vatposs14100.ht...

--------------------------------------------------
Note added at 56 min (2013-12-11 18:29:48 GMT)
--------------------------------------------------

This also seems to apply to your specific context (i.e. VAT being accounted for by the principal contractor instead of the subcontractor).
See http://www.revenue.ie/en/tax/vat/property/reverse-charge.pdf

--------------------------------------------------
Note added at 15 uren (2013-12-12 09:17:52 GMT)
--------------------------------------------------

Both links provided above clearly show that the HMRC department refers to this mechanism as 'reverse charge (VAT)'. With regard to reverse charge VAT in the construction industry (see second link), the department provides the following instructions:

If you are a subcontractor:
• You will no longer charge VAT to the principal.
• You should issue an invoice* to the principal, which includes your VAT registered number but does not include the VAT rate or VAT amount.
• The invoice will also contain the statement “VAT ON THIS SUPPLY TO
BE ACCOUNTED FOR BY THE PRINCIPAL CONTRACTOR”

--------------------------------------------------
Note added at 15 uren (2013-12-12 09:21:55 GMT)
--------------------------------------------------

And see also http://www.revenue.ie/en/tax/vat/property/faqs-reverse-charg... and http://www.revenue.ie/en/tax/vat/property/vat-rules-contract...

--------------------------------------------------
Note added at 15 uren (2013-12-12 09:23:59 GMT)
--------------------------------------------------

http://www.proz.com/kudoz/dutch_to_english/law:_taxation_cus...

--------------------------------------------------
Note added at 1 dag22 uren (2013-12-13 16:02:14 GMT)
--------------------------------------------------

And see http://www.belastingdienst.nl/wps/wcm/connect/bldcontenten/b...

Kitty Brussaard
Netherlands
Local time: 07:27
Native speaker of: Native in DutchDutch
PRO pts in category: 26
Grading comment
Selected automatically based on peer agreement.

Peer comments on this answer (and responses from the answerer)
neutral  writeaway: "... if the client is a company based in the Netherlands, no VAT may be charged on the invoice. In that case the reverse charge rule of article 12, paragraph 3, of the Dutch VAT Act is applicable. /reverse charge will be very amusing to see on an invoice
31 mins
  -> Please see the second link in my answer: The invoice will also contain the statement “VAT ON THIS SUPPLY TO BE ACCOUNTED FOR BY THE PRINCIPAL CONTRACTOR”.
agree  freekfluweel: Ook volgens IATE! http://iate.europa.eu/SearchByQuery.do?method=searchDetail&l... (zie ook d-box)
13 hrs
  -> Dank!
agree  Michaela Krijne
16 hrs
  -> Dank!
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