If the supplies are to a business that is not VAT registered or to customers for non-business use these are not caught by the Reverse Charge. In addition, the supplies must be taxable at the standard or reduced rates. Zero-rated supplies of goods or services are outside the scope of the Reverse Charge.

Is reverse charge zero rated?

Normally, a business making an intra-Community acquisition of goods is liable to pay the tax under the reverse charge mechanism. The outgoing side of this transaction is called intra-Community supply, which is zero-rated provided all conditions are met.

Who does VAT reverse charge apply?

6. Who does the VAT reverse charge for construction services apply to? It applies only to VAT-registered businesses who are supplying/receiving services that are reported under CIS.