How does reverse charge (§13b UStG) work for German businesses receiving foreign invoices?

The reverse charge mechanism (Umkehr der Steuerschuldnerschaft) transfers VAT accounting from the supplier to the customer (Leistungsempfänger). In normal circumstances, the supplier charges USt; under reverse charge, the customer self-assesses it. For VAT-registered businesses, this is typically tax-neutral — you report output USt and simultaneously claim it as Vorsteuer.\n\nWhen reverse charge applies under §13b UStG\nThe main scenarios:\n1. Services from EU businesses (§13b Abs. 1 UStG): if a German USt-registered business receives services from a business in another EU member state, reverse charge applies. The German recipient reports the German VAT. Example: a German GmbH receives legal advice from a French law firm. The French firm invoices without French VAT. The German GmbH self-assesses German USt at 19% and simultaneously reclaims it as Vorsteuer.\n2. Services from non-EU businesses: same principle for services received from businesses outside the EU (§13b Abs. 2 Nr. 1 UStG). Example: a German company subscribing to US-based SaaS — the US supplier typically invoices without German USt; the German recipient self-assesses.\n3. Construction services (Bauleistungen, §13b Abs. 2 Nr. 4 UStG): if a German construction company provides services to another construction company, reverse charge applies. The recipient accounts for the USt.\n4. Real estate transaction services, security services, metal trading, and certain other sectors: also covered under §13b.\n\nHow to handle a reverse charge invoice\nWhen you receive an invoice from an EU or non-EU supplier with no VAT charged (or with a note like 'VAT zero-rated — reverse charge applies' or 'Steuerschuldnerschaft des Leistungsempfängers gemäß §13b UStG'), you:\n1. Calculate the German USt on the net invoice amount (19% standard or 7% reduced as appropriate)\n2. Report this as output USt in your Voranmeldung (Kennzahl 77 or the appropriate box)\n3. Simultaneously claim the same amount as Vorsteuer (Kennzahl 67)\n4. Net effect: zero additional tax for a fully VAT-registered business with taxable supplies only\n\nFor businesses with exempt or partially exempt supplies (e.g., some financial services, insurance, residential real estate), the Vorsteuer on reverse charge supplies may be partially or fully blocked — making the reverse charge a real cost in those cases.\n\nInvoicing: what you should issue as a German supplier\nIf you are a German business providing services to a VAT-registered customer in another EU country, you should:\n- Issue an invoice without German USt\n- Include your USt-IdNr. (DE...)\n- Include the customer's verified USt-IdNr. (verified via EU VIES)\n- Add the note: 'Steuerschuldnerschaft des Leistungsempfängers / VAT reverse charge — Article 196 EU VAT Directive'\n- Report the supply in the Zusammenfassende Meldung (ZM) as an intra-EU service supply\n\nZusammenfassende Meldung (ZM)\nGerman businesses making intra-EU supplies of goods or services to VAT-registered customers in other EU countries must file a ZM (recapitulative statement) reporting each customer's VAT number and the total supply value. Monthly ZM for goods supplies over certain thresholds; quarterly for services. Filed via ELSTER by the 25th of the following month (goods) or quarter.\n\nB2C digital services: OSS scheme\nIf your business sells digital services (streaming, software, apps, online courses) directly to private consumers (non-business customers) in other EU countries, the reverse charge does NOT apply — you charge the local VAT rate of the customer's country. German businesses in this position must register for the OSS (One Stop Shop) scheme via the BZSt and report EU-wide B2C digital service sales in a quarterly OSS return, rather than registering in each EU country separately.