Reverse Charge (§ 13b UStG)
German VAT mechanism shifting the obligation to declare and pay VAT from the seller to the buyer in specific cross-border or sector-specific B2B transactions.
Reverse Charge is the colloquial name for the Steuerschuldnerschaft des Leistungsempfängers under § 13b of the German Umsatzsteuergesetz. It shifts the obligation to declare and pay VAT from the seller (the normal case) to the buyer in specific B2B transactions.
Where it applies for watch dealers
The most common Reverse Charge case for German watch dealers is a B2B sale of a watch to another EU business outside Germany. Example:
- A dealer in Munich sells a watch to a dealer in France.
- The Munich dealer issues an invoice without German VAT.
- The French dealer declares both the input VAT and the output VAT on their French VAT return (a wash), and gets to deduct it.
Reverse Charge can also apply to certain domestic services (construction work, scrap metal, mobile phone batches above a threshold) but these are rarely relevant for watch trading.
Invoice requirements
A Reverse Charge invoice must:
- Show no German VAT (no 19% line).
- Include both parties' valid EU VAT IDs.
- Carry the legal note: "Steuerschuldnerschaft des Leistungsempfängers" or "Reverse Charge".
- Reference § 13b UStG.
The customer's VAT ID must be verified as valid via the German Bundeszentralamt für Steuern (BZSt) MIAS database. Failure to verify can void the Reverse Charge claim.
Versus Differenzbesteuerung
A watch that was acquired under Differenzbesteuerung cannot be sold under Reverse Charge while still claiming margin treatment. The schemes are mutually exclusive per transaction. A dealer selling a § 25a watch B2B to an EU buyer has to either keep it on the margin scheme (full price billed, no VAT shown, no Reverse Charge note) or switch the watch to Regelbesteuerung and apply Reverse Charge.
Practical workflow
For ChronoDesk users: the tax scheme is set per watch. When you mark an invoice destination as an EU B2B buyer with a verified VAT ID, Reverse Charge invoicing becomes available if the watch is on Regelbesteuerung. The system emits the correct legal note automatically.
Common pitfalls
- Forgetting to verify the buyer's VAT ID via MIAS before issuing the invoice.
- Mixing Differenzbesteuerung with Reverse Charge on the same transaction (not allowed).
- Misclassifying a domestic B2B sale as Reverse Charge (rarely applies to watch trades).
Related: differenzbesteuerung, kleinunternehmer, zugferd, ankaufsrechnung.