VAT and Reverse-Charge Calculator
Work out the VAT to self-account for on a cross-border AI invoice under the reverse charge, at a rate you enter, including the part you cannot deduct.
Declared as output tax and reclaimed as input tax on the same return, so the cash effect is nil. The real cost of the purchase stays at the net amount.
- Net amount invoiced
- 1,000 EUR
- VAT at 21% (output tax you declare)
- 210.00 EUR
- Input tax reclaimed (100% deductible)
- 210.00 EUR
- Irrecoverable VAT — a real cost
- 0.00 EUR
- Total cash cost of the purchase
- 1,000 EUR
- Gross, had the supplier charged the VAT
- 1,210 EUR
What the reverse charge actually does
For business-to-business services inside the EU, the general rule puts the place of supply where the customer belongs rather than the supplier. The practical consequence is that a supplier in another member state invoices you without VAT, and you account for the tax yourself at your own rate: you declare it as output tax and, in the same return, deduct it as input tax. Nothing moves. The liability shifted to you, and it cancels itself out.
Two things break that symmetry, and they are the reason this calculator has a deductible field. If you are partly exempt — the usual cases being finance, insurance, health and education — you cannot deduct all of your input tax, and the share you cannot deduct is a genuine increase in the cost of every API call you make. And if you are not registered at all, the reverse charge is not available to you in the first place.
What evidences it
A valid VAT identification number for the customer, verified and kept. That is what supports the supplier not charging tax, which is why every AI provider asks for one at the billing screen and why the invoice usually carries a line stating that the reverse charge applies. Without a verified number, a supplier will generally treat the sale as business-to-consumer instead, and consumer rules are different — tax is charged at the customer’s rate by the supplier, frequently through a one-stop-shop registration, and there is nothing for you to self-account for.
Supplies from outside the EU, digital-services rules, registration thresholds and the wording an invoice must carry all vary, and they change. That is precisely why the rate here is a field and no country is named anywhere on this page. Compute with it, then let your accountant decide what is true.