Reverse Charge in Greece

Reverse charge for non-established companies in Greece

According to art 194 of the VAT Directive, Member States may implement an optional reverse charge on supplies made by non-established businesses.

Greece has introduced the reverse charge mechanism on domestic supplies of services made by foreign non-established companies:

  • Supplier requirements
    Foreign taxable person not established in Greece.
  • Customer requirements
    Taxable person established in Greece.
  • Scope
    Domestic supplies of services.

Reverse charge in B2B services

Article 196 of the VAT Directive requires the reverse charge mechanism on all services subject to the B2B rule introduced in art. 44 of the same Directive. The B2B rule locates the transaction where the business customer is located. In case the customer is a private individual, B2C rules locate the transaction where the supplier is located.

According to the general B2B rule, any business resident outside Greece supplying services to a Greek based customer will not charge any VAT and the transaction will be reverse charged by the customer.

There are however a number of exceptions to this rule. Where these exceptions apply, reverse charge is still applicable in Greece provided the following conditions are met:

  • Services connected to immoveable property are located where the property is located.
  • Passenger transport services will be located where the transport takes places (apportioned if necessary).
  • Catering services are located where the catering takes place.
  • Short term leasing of means of transport are located where the vehicle put at the disposal of the customer.
  • Access to conferences, fairs and exhibitions is located where the event takes place.

The general rule may also be deviated where the supplier has a permanent establishment in the country of the customer and the PE has intervened in the supply.

Find out more about the rules for B2B services in the EU here.

Reverse charge on specific goods and services in Greece

Domestic reverse charge may also apply to certain domestic supplies goods and services made in Greece to another taxable person, as regulated in Art. 39.5 Greek VAT Law:

  • Domestic supplies of scrap material (metals (ferrous or not), glass, paper or cartons) when the customer is a reselling company. In such case, the invoice shall contain the following mention: “article 39a, the purchaser of the goods is liable to remittance of the VAT”.
  • Supplies of greenhouse gas emission certificates, when the customer is a taxable person established in Greece.
  • Supply of construction work when supplies to public authorities.
  • Supplies of mobile telephones, game consoles, tablet PCs, and laptops (Article 39a, par. 5 Greek VAT Law): the reverse charge applies.

Find here and here more information about the reverse charge under Article 39a, par. 5 Greek VAT Law in Greece, and the online service available for sellers to verify that their customers buying goods are taxable persons and have the right to deduct input VAT. This online service is also useful for the seller to verify the right of representatives of buyers to proceed with a purchase. The use of this service is not mandatory.

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