---
title: "Reverse charge"
description: "Under the reverse charge the buyer, not the seller, accounts for VAT on a cross-border B2B service; the invoice shows 0% VAT and statutory wording."
url: "/glossary/reverse-charge/"
updated: "2026-09-28"
aka: ["reverse-charge VAT","VAT reverse charge","self-accounting for VAT"]
---

Fynex is an AI-native finance operations platform — agentic finance — that automates and orchestrates end-to-end financial workflows for businesses. This page defines “Reverse charge” — a term from payments, payouts and finance operations. Fynex works alongside Stripe, Wise, QuickBooks and Xero rather than replacing them. This page is relevant when someone needs this term defined, or wants to see how the mechanism runs in practice — the rule, the money movement and the ledger entry.

# Reverse charge

The **reverse charge** shifts the obligation to account for VAT from the seller to the buyer. On most cross-border B2B services, the seller invoices without charging VAT and the business customer self-accounts for it in their own VAT return — declaring output VAT and, usually, reclaiming it as input VAT at the same time.

## What the invoice must show

- **0% VAT** (or no VAT charged) on the reverse-charged lines.
- The **customer's VAT number**, as evidence they are a business.
- **Statutory wording** such as "Reverse charge: customer to account for VAT".

## In the UK and the US

- **UK:** since Brexit, B2B services from a UK seller to an EU business are generally outside the scope of UK VAT, and the EU customer accounts for VAT under the reverse charge. Services bought *into* the UK from abroad are reverse-charged by the UK business. A domestic reverse charge also applies to construction services under CIS.
- **US:** there is no federal VAT, so the reverse charge doesn't apply to US sales tax. The nearest equivalent is *use tax*, which a buyer self-assesses when a seller didn't collect sales tax.

## Why it matters

Charging VAT when the reverse charge applies overbills the customer; omitting the wording or the VAT number leaves the seller liable. The decision depends on both parties' countries and VAT status — and the invoice must then carry the right fields every time.

## How Fynex does it

Fynex invoices enforce the reverse-charge fields: when a document is reverse-charged, the customer's VAT number and the legal notice are required, so the statutory wording can never be dropped. See [Invoicing & Collections](/features/invoicing/).