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Domestic reverse charge: when the buyer completes the invoice and owes the tax
The module’s worked examples, then cases to attempt before revealing their solution · 3 sections · 358 words · 4 min
Worked example
The invoice received on 25 March
A business receives a reverse-charge invoice for €10,000 net on 25 March. It completes it with VAT at 22%, which is €2,200. It can record it by 31 March or, at the latest, by 9 April, fifteen days after receipt. Either way the entry refers to March.
Worked example
Marco and the building firm
Marco invoices the building firm €20,000 for installing an electrical system in a building, with no VAT and the wording "inversione contabile". The firm completes it at 22%: 20,000 × 22% = €4,400. It records €4,400 as output tax and €4,400 as input tax. The net effect on its settlement is zero, and Marco receives a €20,000 transfer.
Practical case
A subcontract and an end-of-month clean
A renovation firm receives two e-invoices without VAT, each marked "inversione contabile". The first, received on 28 April 2026, comes from a subcontractor that carried out masonry work for €12,000. The second, received on 30 April, comes from a cleaning company that cleaned a building site at the end of the works for €1,500. Both services are at the standard rate and the firm has full deduction rights. How much tax does it add in total, by what date can it record each invoice, and what is the net effect on its April settlement?
Hint: Match each service to its letter of the sixth paragraph, work out the tax at 22%, and count fifteen days from the date of receipt, remembering which month the entry refers to.
Show the solution
The subcontractor's masonry falls under letter a), the cleaning of a building under letter a-ter). Tax on the first: 12,000 × 22% = €2,640; on the second: 1,500 × 22% = €330; total €2,970. The first invoice, received on 28 April, is recorded within April or at the latest by 13 May; the second, received on 30 April, by 15 May; both refer to April, including when done through TD16 documents. The firm records €2,970 as output tax and €2,970 as input tax: with full deduction the net effect on the April settlement is zero.
Answer: €2,970 added; entries by 13 and 15 May 2026, dated to April; net effect zero
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