UBL: TaxCategoryCode "AE": Reverse charge of VAT

To apply reverse charged VAT on a (PDF) invoice is simple, the following is listed on the website of the tax authorities: “Do you want to reverse charge VAT to another entrepeneur? Then you don't charge VAT but have to state "reverse charged VAT" on the invoice. In addition you also have to state the VAT number of the entrepeneur on the invoice".

For further information on reverse charging VAT in the Netherlands we refer you to the website of the Tax Administration. The VAT that is reverse charged to a buyer, must be calculated by the entrepreneur itself. This will be based on the amounts that are invoiced to the buyer. Calculating the reverse charged VAT is important because this will be included in the VAT return of the buyer.

In order to be able to record a (purchase) invoice with reverse charged VAT automatically it is important that in each UBL invoice it is indicated in an uniform way that it concerns reverse charged VAT. You don't solve this by only including the text ‘reverse charged VAT’ in an UBL field.
This means that according to UN/ECE 5305 the following applies to VAT category"AE" (VAT Reverse Charge):

• TaxCategory = “AE”; VAT Reverse Charge. Code specifying that the standard VAT rate is levied from the invoicee.
• TaxExemptionReason = “Reverse charge” (btw verlegd)
• VAT and VAT percentages on the invoice are “0”.
• The VAT numbers of both the supplier and the buyer must be stated on the invoice!

EU-UBL

The document “Electronic Invoicing — Semantic Data Model of the Core Elements of an Electronic Invoice - TC 434 WI 001:2015 (E)” says in accordance about this the following:

The following information is given at the document level:

• The VAT identifier of the Seller; 

• The VAT identifier of the Buyer; 

• The text "Reverse charge" is given for the VAT exemption reason text in the VAT breakdown (Or the equivalent standard text in other languages). 

The following information shall be given on line level:

• The Invoiced item VAT category code for the line is given as AE; 

• The Invoiced item VAT rate for the line is given as 0 (zero); 

• The text "Reverse charge" is given for the invoiced item VAT exemption reason text (or the equivalent standard text in other languages). 

Elaboration of invoice:

This will be included as follows in 4 steps in a UBL invoice:

1. Include VAT number of the sender ánd recipient
2. Include correct VAT category
3. Compose the invoice total
4. Compose the invoice line(s).

Stap 1: Include VAT number of sender ánd recipient

Just like on a paper invoice the VAT number of the sender will be included in a UBL invoice.

<cac:AccountingSupplierParty>
.......
<cac:PartyTaxScheme>

        <cbc:CompanyID schemeID="NL:VAT" schemeAgencyID="ZZZ">NL123456789B01

        </cbc:CompanyID>

        <cac:TaxScheme>

                <cbc:ID schemeID="UN/ECE 5153" schemeAgencyID="6">VAT</cbc:ID>

        </cac:TaxScheme>
</cac:PartyTaxScheme>
……
</cac:AccountingSupplierParty>
<cac:AccountingCustomerParty>
……
<cac:PartyTaxScheme>

        <cbc:CompanyID schemeID="NL:VAT" schemeAgencyID="ZZZ">NL987654321B01

        </cbc:CompanyID>

        <cac:TaxScheme>

                <cbc:ID schemeID="UN/ECE 5153" schemeAgencyID="6">VAT</cbc:ID>

        </cac:TaxScheme>
</cac:PartyTaxScheme>
……

</cac:AccountingCustomerParty>

Stap 2: Include correct VAT category

Category AE and ExemptionReason as given below:

<cac:TaxTotal>

        <cac:TaxSubtotal>

                <cac:TaxCategory>

                        <cbc:ID schemeID="UNCL5305" schemeAgencyID="6">AE</cbc:ID>

                        <cbc:Percent>0</cbc:Percent>

                        <cbc:TaxExemptionReason> Reverse charge (BTW verlegd) </cbc:TaxExemptionReason>

                        <cac:TaxScheme>

                                <cbc:ID schemeID="UN/ECE 5153" schemeAgencyID="6">VAT</cbc:ID>

                        </cac:TaxScheme>

                </cac:TaxCategory>
        </cac:TaxSubtotal>

</cac:TaxTotal>

Stap 3: Compose invoice total

The invoice total, VAT excluded equals the invoice total, VAT included.

<cac:LegalMonetaryTotal>

        <cbc:TaxExclusiveAmount currencyID="EUR">30.55</cbc:TaxExclusiveAmount>

        <cbc:TaxInclusiveAmount currencyID="EUR">30.55</cbc:TaxInclusiveAmount>

</cac:LegalMonetaryTotal>

Stap 4: Compose invoice line(s)

The VA amount and the VAT percentage are both '0'.

<cac:InvoiceLine>

        <cac:TaxTotal>

                <cbc:TaxAmount currencyID="EUR">0.00</cbc:TaxAmount>

        </cac:TaxTotal>

        <cac:Item>

                <cac:ClassifiedTaxCategory>

                        <cbc:ID schemeID="UNCL5305">AE</cbc:ID>

                        <cbc:Percent>0</cbc:Percent>

                        <cac:TaxScheme>

                                <cbc:ID schemeID="UN/ECE 5153" schemeAgencyID="6">VAT</cbc:ID>

                        </cac:TaxScheme>

                </cac:ClassifiedTaxCategory>

        </cac:Item>
</cac:InvoiceLine>