Understanding EU VAT Reverse Charges
Reverse charges apply to B2B supplies of services from an EU country to another EU country. The reverse charge is a tax mechanism that requires the buyer or receiver of the service to account for and pay VAT for the transaction. If the buyer is entitled to VAT recovery, the buyer claims an input VAT credit for the self-assessed output VAT on the same VAT return, thus creating a notional VAT charge. The net amount is zero.
In NetSuite, the supplier creates an invoice with the appropriate tax code for reverse charge transactions. The tax code record must have the Reverse Charge Code box checked.