Reverse Charge

Reverse Charge

Usually, vendors pay taxes to the government for selling goods or services. Reverse Charge is a mechanism by which the customer is liable to pay the tax directly to the government for goods or services that fall under Reverse Charge as specified by your government.

Enable Reverse Charge

You’ll have to enable Reverse Charge for your organization to apply them to your transactions.

  • Go to Settings on the top right corner of the page.
  • Select Taxes under Taxes & Compliance.
  • In the Taxes pane, select Tax Settings.
  • Select the Enable Reverse Charge in Sales transactions checkbox to record reverse for invoices, recurring invoices, quotes, and credit notes.
  • Select the Enable Reverse Charge in Purchase transactions checkbox to record reverse for expenses, recurring expenses, bills, recurring bills, and vendor credits.
  • Click Save.
Enabling Reverse Charge for your organization

Warning: You cannot disable Reverse Charge once you have applied them to transactions.

Apply Reverse Charge to a Transaction

Once you have enabled Reverse Charge, you can apply them to transactions. Here’s how you can do this:

  • Go to the transaction’s creation page.
  • Click + New to create a new transaction.
  • Enter the transaction details.
  • Select the This transaction is applicable for reverse charge checkbox.
  • Click Save.
Applying Reverse Charge for a transaction

Once you apply reverse charge to transactions, you can view the details in the Reverse Charge Summary report and Sales Reverse Charge Summary report.


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