The situation
A batch of subcontractor invoices from three countries
A contractor with sites in Germany, the Czech Republic and Poland gets a few hundred subcontractor invoices a month. Accounts payable has noticed that some carry VAT and some say reverse charge, and nobody is sure which are right.
The trap is that the three countries treat construction services differently. A rule learned on the German sites gives the wrong answer on the Polish ones.
What the research has to settle
The rules behind the answer
- Germany: it depends on the customer
- Under § 13b UStG, the recipient of construction services owes the VAT if it is itself a business that sustainably provides construction services. The certificate from its tax office is the usual evidence.
- Czech Republic: a domestic reverse charge for construction work
- Czech law applies the domestic reverse charge to construction and assembly work between VAT payers, defined by reference to the classification of the work.
- Poland: the reverse charge was replaced
- Poland ended the domestic reverse charge for construction services in November 2019 and moved them into the mandatory split-payment mechanism for listed goods and services above the threshold.
- Wrong treatment costs twice
- VAT charged where the reverse charge applies is generally not deductible by the recipient, and the error has to be corrected with the supplier.
How it runs in azta
From the question to the document
The question, as you would type it
We are a construction company with sites in Germany, the Czech Republic and Poland. Attached are this month’s subcontractor invoices. Which should carry the domestic reverse charge in each country, and which have the wrong treatment?
You start with
A batch of subcontractor invoices from three countries
- 01
Upload the invoices
Add a batch of invoices as PDFs or a spreadsheet export. azta reads the supplier, the service and the VAT shown.
File upload· Pro - 02
Research each country’s rule
Ask how each country treats construction services between businesses. azta cites the German, Czech and Polish VAT acts.
Cited research· Free - 03
Check the invoices against the rule
Ask azta to flag invoices whose treatment does not match the rule for their country, with the reason for each.
File upload· Pro - 04
Draft the note to accounts payable
Ask for a one-page rule sheet per country and a list of invoices to correct. Edit it in Canvas.
Canvas · Ask azta· Pro You send
A checked list showing the correct VAT treatment for each invoice
What you get
A checked list showing the correct VAT treatment for each invoice
AP rule sheet · draft
Subcontractor invoices: VAT treatment by country
Germany. Construction services we receive are subject to the reverse charge because we provide construction services ourselves. Invoices should show no VAT and state that the recipient owes the tax. We hold the certificate from our tax office.
Czech Republic. Construction and assembly work between VAT payers is subject to the domestic reverse charge. Invoices for such work should show no VAT.
Poland. There is no domestic reverse charge for construction services. Invoices carry Polish VAT, and invoices above the threshold for listed services are paid using split payment.
Outcomes on your numbers
What azta is worth on this task
Pro pays for itself after
21 minutes a month
At €80 an hour, that is all the time Pro (€27 a month) has to take off your desk to cover its price.
Example figures. Replace them with your own.
- Hours back a year
- 22
- Capacity at your rate
- €1,728
- More monthly invoice checks a quarter
- 0.7
- Return on Pro
- 5.3×
- Research
- Drafting
- Your review
A scenario you set, not a promise. The hours that come back go to another client, or deeper into this one.
Want these numbers on your team’s real workload?
Book a demoWhat stays with you
- Deciding edge cases, such as mixed supplies of goods and installation.
- Agreeing corrections with suppliers.
- Approving the rule sheet before accounts payable uses it.
Frequently asked questions
- How many invoices can I upload?
- Upload the batch you are checking. azta reads the files and refers back to the passage behind each answer.
- Does it know the current rules?
- Legislation is indexed daily, and each citation shows whether the provision is in force on the date you ask about.
- Can I check an invoice from last year?
- Yes. Give the date and azta focuses on the law as it stood then.
