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Comment by beejiu | Hacker News Reader

The Polish company invoices the German company under the "reverse charge" regime. The German company treats the parts as if they were supplied by another Germany company, charging itself German VAT and refunding itself an equal amount of German VAT. There's nothing collected in Poland.

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Reverse charge only moves vat collection from seller to buyer, so seller doesn't have to deal with 27 tax agencies and buyer only deals with their tax agency.

That's kind-of the point in B2B transactions, it moves VAT all the way down the chain until it hits the consumer.

Nothing collected directly doesn't necessarily mean nothing collected at all. The turnover subject to said regime still needs to be reported, in higher detail if significant. Although I have no idea what exactly happens with such information, it's not hard to imagine it being used to settle the bill between countries.

One wonders how much all that paperwork costs.

We all know who pays for it in the end...

It's actually less paperwork, because you don't have two companies filing separate VAT rates with two tax authorities. On the surface, the reverse charge sounds complex but it actually simplifies things for the importer.

it's mostly one shell script making an XML sent to another shell script that reads it. you also have to pay for the shell script of course

Even if it was expensive, it still wouldn't be a tarrif.

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