Source: https://rivet.global/blog/germany-reverse-charge-13b-for-foreign-services
Published: 2026-07-25 · Updated: 2026-07-25 · By Alexia M.

# Germany reverse charge (§13b UStG) on services from abroad

How a German company accounts for VAT on services from foreign suppliers under §13b UStG: when it applies, the return entries and the supplier's invoice.

## Key takeaways

- Under §13b UStG, a German business buying most B2B services from a foreign supplier owes the German VAT itself.
- It reports the VAT in its advance VAT return and, if entitled, deducts it as input tax in the same return.
- The supplier's invoice should show no German VAT and, for EU suppliers, note the reverse charge.
- The rule applies to software subscriptions, consulting, advertising and many other services from abroad.

German companies buy services from abroad every day: cloud and SaaS from the US, consultants in the Netherlands, ads billed from Ireland. VAT on each of these follows §13b UStG, and the paperwork has to be right even when no cash changes hands.

## How it works

1. The foreign supplier invoices the net amount, with no German VAT.
2. The German company reports German VAT on that amount in its advance VAT return.
3. If entitled to input tax, it deducts the same amount in the same return.

## An example

A Cologne agency pays a US analytics tool $2,000 a month. Converted to €1,850, it reports €351.50 of VAT at 19% and deducts €351.50 as input tax. The cash effect is zero. Missing the entries is a filing error the tax office can pick up in an audit.

## When it does not apply

- Some services are taxed where performed, such as event admission or work on property in Germany.
- Purchases from a supplier that is registered in Germany and charges German VAT correctly.
- Consumers, who are not covered.

## Paying the supplier

Most foreign software suppliers bill in dollars by card. Each charge converts at the card issuer's rate. The euro amount in your books should match what you were charged, so keep receipts that show both.

## Paying into Germany: the local rail

| What | Detail |
|---|---|
| Local rail | SEPA Instant Credit Transfer |
| Run by | European Payments Council scheme, run by each bank |
| Settlement | Under ten seconds, 24/7 |
| Published fee | By the EU Instant Payments Regulation, no more than the bank charges for a standard SEPA transfer |

Source: [European Payments Council: SEPA Instant Credit Transfer](https://www.europeanpaymentscouncil.eu/what-we-do/sepa-instant-credit-transfer). Checked when this guide was last updated; the scheme's own page has the current figures.

## Where Rivet fits

Rivet issues unlimited digital cards on every plan that spend from your USD balance, so dollar subscriptions are paid in dollars, with one card per vendor and receipts on one ledger. EUR details with an IBAN come on Growth. Rivet is not a bank; regulated partner institutions hold the funds. See [Cards](/corporate-cards).

## Questions

### Do I pay VAT on a US software subscription?

You account for it under §13b: report German VAT on the net amount and, if you are fully entitled to input tax, deduct the same amount. The net cash effect is usually zero.

### What if the foreign supplier charged its own VAT?

Ask for a corrected invoice. Foreign VAT is not deductible in your German return.

### Does it apply to small businesses?

It applies to entrepreneurs receiving the service, including small businesses using the Kleinunternehmer rule, which then pay the VAT without deducting it.

### Where does it go in the VAT return?

In the lines for services from EU or non-EU entrepreneurs under §13b, and the input tax line. Your accounting software or Steuerberater maps them.