käänteisvelvoitteita

Käänteisvelvoitteita, often translated as reverse charge obligations, is a mechanism in value-added tax (VAT) systems where the responsibility for accounting for and paying VAT is shifted from the seller to the buyer. This is a departure from the standard VAT procedure where the seller collects VAT from the buyer and remits it to the tax authorities.

The reverse charge mechanism is typically applied in specific situations to prevent VAT fraud and evasion, particularly in cross-border transactions within the European Union and in certain domestic sectors prone to tax avoidance, such as construction or waste management. When a reverse charge applies, the seller does not charge VAT on their invoice. Instead, the invoice will typically state that VAT is reverse charged. The buyer, who is registered for VAT, then accounts for the VAT on their VAT return, both as an input tax (if they are entitled to deduct it) and as an output tax.

This system helps to ensure that VAT is collected at the earliest possible stage in the supply chain. It is particularly effective in preventing carousel fraud, where goods are traded multiple times between different companies, with VAT being charged and reclaimed at each stage, ultimately leading to unrecoverable VAT for the tax authorities. The complexity of reverse charge rules necessitates careful attention from businesses involved in applicable transactions to ensure compliance.