Changed Rules on Reverse Charge Mechanism on Metal Products

Thanks to the proposals of the Chamber, certain metal products, such as ventilation, aspiration, smoke and rainwater pipes are no longer subject to the reverse charge mechanism from 1 May 2018. Furthermore, it is now possible to submit one invoice if by the time of submission of the invoice, the turnover has fully occurred.

From the beginning of the year 2017, the rules according to which the majority of metal products were subject to the reverse charge mechanism and two invoices had to be submitted for them, entered into force. Soon after the entry into force of the amendments, both the Ministry of Finance and the Chamber of Commerce and Industry received feedback from many companies that such amendment increased their administrative burden and caused quite a confusion in their accounting. The Ministry heard the concerns of the entrepreneurs and from 1 May 2018, the number of metal products subject to the reverse charge mechanism has been decreased. Furthermore, two invoices must be submitted only if by the time of the invoice, the turnover has not fully occurred. In such cases a separate invoice with the marking “reverse charge” must be issued for reverse charge.

In order to prevent confusion, the Chamber requested additional information from the ministry regarding what should be done with the invoices that have been submitted for metal products before 1 May 2018, the turnover of which has not yet occurred and which at the same time are no longer subject to the reverse charge mechanism. The Ministry of Finance explained that if an invoice on the respective goods has been issued before 1 May with the marking “reverse charge”, but the turnover occurs on 1 May 2018 or later, the invoice must be cancelled and a new invoice must be submitted. The invoice must be submitted according to the procedure applicable at the time of the occurrence of the turnover. The time of turnover is sending of the goods or receiving of the fee, depending on which occurred earliest.

Read about the amendments HERE (in Estonian).